Circle said it has submitted a response to the European Commission’s targeted consultation on MiCA. According to ChainCatcher, the company said MiCA has given Europe a first-mover advantage, but only three of the top 25 stablecoins by global market value are currently regulated under the framework: USDC, USDG, and EURC.

Circle said the gap is that MiCA does not cover the largest global tokens. It proposed keeping a multi-issuer structure in which globally circulating stablecoins are jointly issued by an EU entity authorized under MiCA and a foreign regulated entity. Circle also proposed an equivalence and recognition regime for foreign-regulated stablecoins, similar to EMIR, CSDR, and MiFIR, with primary supervision by the regulator in the issuer’s jurisdiction, EU-level equivalence recognition, and EBA entity recognition.

On reserve requirements, Circle said MiCA’s rule requiring issuers to place at least 30% of reserve assets in commercial bank deposits could increase bank credit and counterparty risk. It said the European Central Bank should reconsider the requirement and suggested removing two concentration rules in the EBA technical standards.