Circle Recommends That the EU Revise MiCA Rules for Offshore Stablecoins and Reserve Requirements
BIBIBI
AT A GLANCE
Circle recommends that the EU revise MiCA the rules on offshore stablecoins and remove certain bank deposit reserve requirements.
Article
【Circle Recommends That the EU Revise MiCA Rules for Offshore Stablecoins and Remove Bank Deposit Reserve Requirements】USDC Stablecoin issuer Circle submitted a proposal to the European Commission, calling for revisions to the rules on offshore stablecoins under the Markets in Crypto-Assets Regulation (MiCA) and the establishment of a recognition mechanism for offshore issuers. Circle recommends that offshore stablecoin issuers be primarily supervised by the regulatory authorities in their jurisdictions of registration and, after an equivalence determination by relevant parties and the European Banking Authority (EBA) among others, be distributed by locally licensed EU institutions. The mechanism would also allow EUR stablecoins to circulate in offshore jurisdictions. Circle also calls for the removal of the requirement that issuers of e-money tokens hold 30%of their reserve assets at commercial banks; the proportion for “significant” e-money tokens is 60%. The company believes this requirement increases exposure to credit risk in the banking sector and counterparty risk.
Key points
01
USDC Stablecoin issuer Circle submitted a proposal to the European Commission to revise the rules on MiCA offshore stablecoins.
02
Circle advocates establishing a recognition mechanism for offshore issuers.
03
Circle recommends that offshore stablecoin issuers be primarily supervised by the regulatory authorities in their jurisdictions of registration and, after an equivalence determination by relevant parties and the European Banking Authority, be distributed by locally licensed EU institutions.
04
The mechanism would also allow EUR stablecoins to circulate in offshore jurisdictions.
05
Circle calls for the removal of the requirement that issuers of e-money tokens hold 30%their reserve assets at commercial banks; the proportion for “significant” e-money tokens is 60%。
06
Circle believes that bank deposit reserve requirements increase exposure to credit risk in the banking sector and counterparty risk.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
Circle wants the EU to design a recognition and distribution pathway for offshore stablecoins: issuers would primarily be subject to supervision in their jurisdictions of registration, followed by distribution through locally licensed EU institutions after an equivalence determination. It also wants to remove the requirement to deposit a certain proportion of reserve assets with commercial banks.
Why it matters to readers
If the relevant proposals are adopted, the regulatory treatment and distribution of offshore stablecoins in the EU, as well as the reserve asset arrangements for e-money tokens, could change.
This concerns whether and how stablecoins can circulate compliantly in the EU. However, the original text only states that Circle proposed the recommendations; it does not mean that the rules have already been amended.
Risks and unknowns
The original text does not state whether the European Commission or the European Banking Authority has accepted the recommendations.
The original text does not state MiCA whether the amendment process has begun.
The original text does not provide the original document submitted by Circle or a response from the regulatory authorities.
The specific scope of application and implementation conditions of the recommendations remain unclear.
Related Developments
Loading event timeline…
Related concepts
offshore stablecoins
This term is not in the glossary yet. Browse related concepts in the glossary.
