Circle and Hyperliquid-backed group push EU MiCA changes for perps and stablecoin reserves

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MiCA changes for perps & stablecoins

Highlights

Hyperliquid Policy Center urges EU to regulate perpetual futures under MiFID II instead of MiCA, emphasizing economic features over ledger technology.
Circle requests MiCA maintain global stablecoin multi-issuance, allowing both EU-authorized entities and foreign affiliates to co-issue tokens like USDC.
Circle seeks removal of MiCA's 30%-60% reserve bank deposit requirement and 35% sovereign exposure cap, arguing these rules hinder effective reserve management for dollar-backed stablecoins.

MiCA review draws competing industry proposals

The Block reports that the Hyperliquid-funded Hyperliquid Policy Center argues perpetual futures should be regulated under the EU’s 2014 MiFID II framework rather than under 2013’s MiCA regime, and should remain separate from the bloc’s contract for difference rules.

In a letter dated Sept. 30, HPC Chief Executive Jake Chervinsky says the classification of financial instruments should follow an instrument’s economic features, and that the ledger on which it is recorded should not be determinative. The group says the consultation comes at a pivotal time for financial markets, with public blockchains increasingly serving as infrastructure for products that trade continuously and at substantial volume.

Circle, which submitted comments to the same review, is seeking changes to MiCA’s stablecoin framework. The USDC issuer wants multi-issuance preserved, allowing a MiCA-authorized EU entity and a foreign-regulated affiliate to co-issue the same global stablecoin.

Reserve rules face pressure from stablecoin issuer

Circle is also calling for MiCA’s 30% to 60% bank deposit requirement for stablecoin reserves to be replaced. The company is seeking the removal of two limits in the European Banking Authority’s technical standards, including a cap that restricts exposure to any single government to 35% of reserves.

Circle says that cap makes it impractical for dollar-denominated tokens to hold the bulk of reserves in sovereign debt such as U.S. Treasurys. The company’s push comes after USDC briefly lost its $1 peg in March 2023, when Circle disclosed that $3.3 billion of roughly $40 billion in reserves was held at Silicon Valley Bank before the bank failed.

The proposals underscore how the EU’s MiCA review is becoming a key test for the treatment of crypto-linked market infrastructure and reserve management. Any changes could affect how derivatives and stablecoins are structured across the region as regulators in multiple jurisdictions weigh how regulated products can operate on public blockchains.

Our earlier article on UK and EU budget constraints explained how political and fiscal rules are pushing both systems toward incremental changes, limiting their ability to fund newer priorities such as defence, energy, and technology. It also noted that, for the EU, this rigidity could accelerate the use of parallel, targeted debt-funded instruments as the traditional multi-year budget becomes less flexible. That backdrop helps frame why regulatory reviews like MiCA are becoming another key battleground over how Europe allocates capacity and sets rules for fast-evolving markets.

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