October 5th 2026, 9:10 AM
Circle and Tether Unite Against EU's MiCA 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.
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EU's MiCA Regulation Sparks Controversy
Circle and Tether, two prominent stablecoin issuers, have found common ground in their opposition to the European Union's Markets in Crypto Assets (MiCA) regulation's bank reserve rules.Circle's Proposal
Circle's longer-term proposal would require Commission equivalence and EBA issuer recognition before distribution through a locally licensed institution.Tether's Stance
While Tether has not made a formal proposal, the company has expressed concerns about the MiCA regulation's potential impact on its operations and the stability of the stablecoin market.Industry Reactions
The opposition from Circle and Tether has sparked a heated debate in the industry, with some arguing that the regulation is necessary to protect consumers and maintain financial stability, while others claim that it is overly restrictive and could stifle innovation.#Circle#Tether#MiCA#EU#CryptoRegulation