Circle and Tether find common ground against MiCA’s bank reserve rules

Key Summary

Circle has proposed a recognition regime to allow foreign-regulated stablecoins to distribute tokens in Europe without fully becoming EU issuers, aiming to loosen MiCA's bank reserve rules. The proposal, which Circle is urging the European Union to adopt, would determine if a foreign jurisdiction's regulatory regime is equivalent to EU standards, allowing issuers to distribute tokens through locally licensed institutions. Circle also challenges the 30% and 60% reserve requirements, arguing that mandatory deposits increase issuers' exposure to bank credit and counterparty risk. This is echoed by Tether CEO Paolo Ardoino, who previously declined to seek an EU license due to the same requirement.