Stablecoin issuer Circle has urged the European Commission to reduce barriers that limit institutional participation with crypto-asset service providers, responding to elements of the Commission’s Market Integration Package (MIP). In feedback submitted on March 20, Circle described the MIP as a “meaningful step toward a digitally enabled financial system” but flagged several areas that need adjustment to foster market development.
Circle called for changes to the DLT (distributed ledger technology) Pilot Regime and for measures to scale e-money tokens (EMTs) by widening which crypto-asset service providers can operate. The company said these reforms would help the MIP deliver clearer, more practical rules for integrating blockchain-based services into Europe’s capital markets.
The Markets in Crypto-Assets Regulation (MiCA), which took effect in December 2024, aims to create a harmonized legal framework for crypto in the EU but has been criticized for being hard to interpret and unevenly applied across member states. Circle said the MIP presents an opportunity to add legal clarity on practical questions market participants face, including guidance on which crypto-assets are acceptable as collateral.
A central recommendation from Circle is to lower the market-capitalization threshold that determines which EMTs can be used for settlement under the Central Securities Depositories Regulation (CSDR). Limiting settlement eligibility to only “significant” EMTs, Circle warned, risks excluding euro-denominated tokens and creating a “chicken-and-egg scenario” that suppresses adoption, institutional involvement, and secondary-market liquidity. Circle noted that no euro-denominated EMT currently approaches the existing threshold and urged the Commission to adopt adaptive thresholds tied to market uptake and liquidity and assessed by supervisors.
Circle also argued the proposed DLT Pilot Regime inappropriately confines cash accounts to credit institutions and central securities depositories, and should be expanded to include qualified crypto-asset service providers so they can participate in settlement and related services.
Overall, Circle said the MIP is a pivotal chance for the EU to modernize its financial plumbing: connecting traditional finance to blockchain infrastructure with clear, proportionate rules could unlock greater efficiency and liquidity across European markets. Circle offers the dollar-backed USDC and a euro-backed, MiCA-compliant stablecoin, EURC, in Europe as part of that broader market ecosystem.