Circle Challenges EU Stablecoin Rules Over Compliance Gap

Patrick Hansen, Circle’s director of EU strategy and policy, identified USDC, USDG, and EURC as the only tokens among the top 30 to satisfy the current regulatory standards. In an October policy submission, the firm argued that rigid mandates, specifically the requirement to hold at least 30% to 60% of backing assets in commercial bank deposits, force unnecessary exposure to credit and counterparty risks. Instead, Circle advocates for a liquidity-focused model that prioritizes the availability of assets for redemptions over fixed banking thresholds.

Beyond reserves, the company is pushing for a formal recognition process for foreign-regulated stablecoins, drawing inspiration from the U.S. GENIUS Act. This proposal would allow issuers to maintain primary supervision in their home jurisdictions while distributing tokens in Europe via local affiliates. Circle maintains that failing to adapt these rules will drive European activity toward offshore providers, undermining the very protections the MiCA framework was designed to establish. The firm’s own EURC token has seen growth under the existing regime, surpassing €400 million in circulation, yet it remains an outlier in a global market where most major stablecoins operate outside European oversight.