Circle urges EU to ease crypto rules to boost market growth
Circle has proposed reducing barriers to crypto activity in Europe. The company submitted its recommendations to the European Commission as part of the Market Integration Package (MIP).
This package is aimed at developing digital financial markets, as stated in the press release.
Circle called it an important step but pointed out several issues. The main concern is overly strict requirements for market participants. According to the company, these rules limit institutional access. This reduces liquidity and slows down sector growth. Circle believes the current framework hinders the scaling of stablecoins, particularly euro-denominated assets.
Key issue — restrictions for EMT and DLT
The company criticized the current rules for so-called e-money tokens (EMT). Their use in payments is currently limited by high capitalization requirements. Circle views these thresholds as a structural barrier. They prevent new products from entering the market. The company also highlighted restrictions under the DLT Pilot Regime.
In its current form, only banks and central securities depositories have access to the infrastructure. Crypto service providers are effectively excluded. This reduces competition and innovation. Circle proposes expanding access to licensed crypto firms. This would accelerate blockchain integration into the financial system.
EURC faces scaling challenges
Circle is actively promoting its euro stablecoin EURC, which complies with MiCA requirements. However, no euro-denominated EMT has yet reached the required capitalization level. This makes their full use in payments impossible.
As a result, the market faces a catch-22 situation. Without infrastructure access, there is no growth, and without growth, there is no access. Circle proposes introducing more flexible criteria, such as considering liquidity and real usage instead of just market size. This could accelerate the adoption of euro stablecoins and improve competition with dollar-based alternatives.
Europe risks falling behind without regulatory reform
Circle sees the MIP as a critical moment for modernizing the EU financial system. The company emphasizes the need to balance regulation and innovation. Current MiCA rules are already facing criticism for complexity and inconsistent implementation. If barriers remain, Europe risks losing ground to other regions.
At the same time, the global stablecoin market continues to expand. A more flexible regulatory approach could attract institutional capital, increase liquidity, and accelerate infrastructure development. Otherwise, the European market risks remaining on the periphery of digital finance.
Recently we wrote that the market capitalization of the stablecoin USDC has approached its all-time high amid growing demand for digital dollar assets. According to CoinMarketCap, the supply of USDC has reached approximately $79.2 billion, nearly matching the previous record set at the end of last year.
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