Circle Internet (CRCL) Urges EU to Reduce Crypto Settlement Barriers

TLDR

• Circle provided its input to the European Commission on March 20 regarding the proposed Market Integration Package.
• The company advocates for reduced market capitalization requirements for e-money tokens (EMTs) to qualify for use in settlement.
• At present, no euro-denominated EMT, not even Circle’s EURC, satisfies the current criteria.
• Circle proposes implementing “adaptive” thresholds linked to market dynamics instead of rigid, fixed limits.
• It also seeks to allow crypto-asset service providers, not solely banks, to hold cash accounts under the DLT Pilot Regime.

(SeaPRwire) –   Circle has informed European regulators that their draft regulations for cryptocurrency settlement are overly stringent and may impede institutional engagement in tokenized markets.

Circle Internet Group, CRCL

The stablecoin company delivered its feedback on March 20 concerning the European Commission’s Market Integration Package—a comprehensive policy effort aimed at reinforcing EU capital markets.

Circle acknowledged the MIP as a “meaningful step toward a digitally enabled financial system” but emphasized that several aspects require refinement to ensure the rules operate effectively.

CRYPTO: CIRCLE PUSHES EU TO FAST-TRACK DLT REFORMS AND EXPAND STABLECOIN SETTLEMENT RULES@circle just told European regulators to move faster or lose the race to the U.S.

In formal feedback submitted March 20 on the European Commission’s Market Integration Package, Circle… pic.twitter.com/xHPGTkdeJD

— BSCN (@BSCNews) March 23, 2026

The central concern involves e-money tokens and their role in settling securities transactions. The current draft rules would allow only “significant” EMTs for cash-leg settlement, a designation based on market capitalization benchmarks.

Circle stated that no euro-based EMT, including its own EURC stablecoin, comes near to achieving that benchmark. EURC is presently valued at $1.16.

A Chicken-and-Egg Problem

Circle characterized this as a structural impediment. If tokens are barred from settlement use until they achieve a specific size, yet cannot attain that size without being used in settlement, the framework creates a circular problem that stifles development.

“Restricting settlement to ‘significant’ EMTs risks excluding euro-denominated EMTs,” Circle stated, noting that the thresholds represent a “structural barrier to institutional participation and secondary market liquidity.”

To address this, Circle is requesting the Commission to embrace “adaptive” thresholds—ones connected to practical metrics such as market adoption and liquidity—as opposed to static ceilings that necessitate complete legislative revisions to adjust.

The firm also raised concerns about the speed of regulatory change. It encouraged authorities to accelerate amendments independently of the wider legislative schedule, repeating cautions from tokenization companies last month that holdups might divert activity to the U.S., where on-chain market development is progressing more rapidly.

DLT Pilot Regime and Collateral Rules

Apart from settlement criteria, Circle criticized the current design of the DLT Pilot Regime. The existing proposal restricts cash accounts within the regime to credit institutions and central securities depositories.

Circle argues for broadening this to incorporate crypto-asset service providers, contending that the present arrangement introduces needless complication and inefficiency.

The company additionally requested more explicit regulations governing the use of stablecoins as collateral, referencing similar initiatives underway in the U.S. and UK.

Regarding oversight, Circle advocated for a more limited scope for centralized EU-level supervision. It proposed that ESMA concentrate on large, cross-border entities, while smaller firms remain under the jurisdiction of national regulators.

The cornerstone of EU cryptocurrency regulation continues to be the Markets in Crypto-Assets Regulation (MiCA), which became operational in December 2024. MiCA has faced criticism from certain legal analysts who argue it is complex to understand and enforced unevenly across member states.

Circle’s EURC is a MiCA-compliant, euro-pegged stablecoin. Its leading product remains USDC, which is currently valued at $1.

Circle described the MIP as a “pivotal moment” for the EU to bridge conventional finance with blockchain technology, adding that more transparent and balanced regulation would enhance the region’s market efficiency and liquidity.