Circle, the stablecoin issuer, has submitted formal feedback to the European Commission urging it to reduce barriers for institutions seeking to engage with crypto-asset service providers. The response addresses the Commission’s proposed Market Integration Package (MIP), a policy initiative designed to strengthen capital markets across Europe. Circle submitted its recommendations on March 20, describing the MIP as a meaningful step toward a digitally enabled financial system while identifying several areas requiring improvement.
The primary piece of crypto legislation currently in force across Europe is the Markets in Crypto-Assets Regulation, which took effect in December 2024. Despite its significance, the regulation has drawn criticism from legal professionals in the sector. Yuriy Brisov, a partner at Digital & Analogue Partners, has argued that the regulation is difficult to interpret and that its implementation differs considerably from one country to another. Circle contends that the MIP could address some of this uncertainty by clarifying which crypto-assets may be used as collateral.
A central concern raised by Circle relates to the treatment of e-money tokens (EMTs) under the Central Securities Depositories Regulation. The company recommends lowering the market capitalisation threshold required for EMTs to be used in settlement. As currently structured, Circle argues, restricting settlement to so-called significant EMTs risks excluding euro-denominated tokens and creates a situation that stifles their growth before they can reach the required scale.
Circle described the existing thresholds as a structural barrier to institutional participation and secondary market liquidity. The company noted that no euro-denominated EMT is currently close to meeting the market cap threshold, making the requirement particularly restrictive in practice. To address this, Circle recommends that the Commission adopt more adaptive thresholds based on criteria such as market uptake and liquidity conditions, alongside ongoing supervisory assessments.
Circle operates two stablecoins relevant to the European market. In addition to its flagship USDC stablecoin, the company offers EURC, a euro-backed stablecoin that is compliant with the Markets in Crypto-Assets Regulation. The limitations imposed by current EMT thresholds are therefore of direct commercial relevance to Circle’s European operations and its ability to expand institutional use of euro-denominated digital assets.
The company also raised concerns about the DLT Pilot Regime as currently proposed under the MIP. Circle argues that the regime’s restriction of cash accounts to credit institutions and central securities depository financial institutions is too narrow. It recommends expanding access to include crypto-asset service providers, which it says would better reflect the realities of the current digital asset landscape and support broader market participation.
Circle concluded its submission by framing the MIP as a pivotal moment for the European Union to modernise its financial infrastructure. The company argued that connecting traditional finance with blockchain infrastructure through clear and proportionate regulation would unlock greater efficiency and liquidity across the region. The Commission has not yet publicly responded to Circle’s recommendations.
Originally reported by CoinTelegraph.
