Circle has urged the European Union to revise stablecoin reserve requirements in its response to the MiCA review consultation. The US-based issuer wants to replace mandatory bank-deposit minimums with more flexible liquidity rules and preserve cross-border stablecoin issuance. In March 2023, Circle faced these risks firsthand when $3.3 billion in USDC reserves were held at Silicon Valley Bank, causing the stablecoin to temporarily lose its dollar peg. MiCA currently requires e-money token issuers to hold at least 30% of reserves in commercial bank deposits, with 60% for significant issuers. Circle is also calling for the removal of concentration limits including a 35% cap on exposure to a single sovereign and a 1.5% ceiling on deposits with each counterparty relative to that bank’s total assets.
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