Stablecoin issuer Circle has asked the European Commission to lower barriers that limit institutional engagement with crypto-asset service providers, responding to parts of the Commission’s proposed Market Integration Package (MIP) — a wide-ranging initiative intended to strengthen Europe’s capital markets.
In a statement Monday, Circle said the MIP proposals are a “meaningful step toward a digitally enabled financial system” but identified areas needing improvement. Its feedback, submitted March 20, called for reforms to the DLT (distributed ledger technology) Pilot Regime and measures to scale e-money tokens (EMTs) by allowing more crypto-asset service providers to operate.
The main EU crypto law, the Markets in Crypto-Assets Regulation (MiCA), took effect in December 2024 but has faced criticism from some lawyers for being hard to interpret and unevenly implemented across member states. Circle said the MIP could provide additional legal clarity for market participants, including guidance on which crypto-assets can be used as collateral.
A central recommendation from Circle is lowering the market-capitalization threshold that determines which EMTs can be used in settlement under the Central Securities Depositories Regulation. Circle warned that restricting settlement to only “significant” EMTs risks excluding euro-denominated tokens and creates a “chicken-and-egg scenario” that stifles growth, acting as a structural barrier to institutional participation and secondary market liquidity.
Circle offers the dollar-backed USDC and a euro-backed, MiCA-compliant stablecoin, EURC, in Europe. The company noted no euro-denominated EMT is near the current market-cap threshold and urged the Commission to adopt more adaptive thresholds based on market uptake and liquidity conditions, assessed by supervisors.
Circle also argued the proposed DLT Pilot Regime unduly limits cash accounts to credit institutions and central securities depositories and should be expanded to include crypto-asset service providers. The company concluded the MIP is a pivotal opportunity for the EU to modernize its financial system, saying that connecting traditional finance to blockchain infrastructure with clear, proportionate regulation could unlock improved efficiency and liquidity in the region.
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