Stablecoin Issuer Circle Urges Faster EU Crypto Reforms to Support Market Growth

TLDR

• Circle urges EU to speed up crypto rules to support market growth
• Firm calls for higher DLT pilot limits and expanded asset scope
• Circle pushes for wider use of MiCA compliant stablecoins
• Company warns delays may shift activity to US markets
• Calls for adaptive rules tied to market conditions and liquidity

Circle has called on European Union policymakers to speed up reforms to the digital asset framework, citing the need for improved market access and scalability. The company submitted feedback on the European Commission’s Market Integration Package, noting progress but also identifying key gaps.

The firm stated that delays in reform could slow the pace of institutional adoption and shift activity toward other regions. The recommendations focus on improving liquidity, settlement processes, and regulatory clarity.

Circle Supports DLT Changes but Calls for Higher Limits

Circle expressed support for updates to the Distributed Ledger Technology pilot regime, which allows trading and settlement using blockchain systems. However, the company said current thresholds remain restrictive.

It recommended expanding the range of eligible assets and increasing trading volume limits. These changes are aimed at supporting higher liquidity and broader institutional participation.

The firm also proposed introducing adaptive thresholds that respond to market conditions. It noted that fixed limits and periodic updates may not keep pace with rapid market changes.

Circle stated that a clearer transition path from pilot programs to permanent rules is needed. This would provide greater certainty for market participants and support long-term planning.

Stablecoins Seen as Key for Securities Settlement

Another focus of Circle’s response was the role of stablecoins in financial markets. The company encouraged wider use of tokens that comply with the Markets in Crypto Assets regulation.

It welcomed proposals to allow e money tokens in settlement but warned against limiting access to only large tokens. Such restrictions could exclude euro denominated stablecoins.

Circle also called for allowing crypto service providers to offer settlement accounts alongside banks and central securities depositories. It said the current structure adds complexity and slows adoption.

The company further suggested clearer rules for using stablecoins as collateral. This aligns with ongoing developments in other major financial markets.

Supervision Framework and Market Competition Concerns

Circle addressed regulatory oversight and suggested a more targeted approach. It recommended that EU level supervision focus on large cross border firms.

Smaller entities could remain under national regulators, which may allow more flexibility and faster responses. This structure aims to balance oversight with operational efficiency.

The firm also warned that slow regulatory progress could affect the EU’s position in global markets. It noted that other regions, including the United States, are advancing blockchain based financial systems.

“Markets thrive on clarity,” the company said in its statement, emphasizing the need for consistent and transparent rules. It added that faster reforms could support innovation and participation.

Push for Faster Reforms Outside Legislative Timelines

Circle encouraged policymakers to pursue updates outside standard legislative timelines. The company stated that relying only on long processes may slow development.

It said targeted reforms could be introduced more quickly to address immediate challenges. This approach may help maintain competitiveness in emerging digital markets.

The response reflects broader industry concerns about the pace of regulatory change. Companies continue to seek frameworks that can adapt to evolving technology and market activity.

Circle’s recommendations focus on improving access, increasing flexibility, and supporting growth in tokenized finance. The discussion around these proposals is expected to continue as the EU reviews its digital asset strategy.

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