Circle, a major issuer of regulated stablecoins and provider of blockchain-based financial infrastructure, has published its official response to the European Commission’s Market Integration Package. The company outlined several recommendations it believes will strengthen the EU’s approach to digital assets and help promote the growth of its capital markets. Based in the United States, Circle is known for USDC and EURC, two prominent fiat-backed stablecoins used by institutional and retail players worldwide.
Adapting DLT Pilot Regime And EMT Settlement Rules
Circle’s feedback, submitted on March 20, 2026, addressed four primary areas of reform: the DLT Pilot Regime, e-money token (EMT) settlement, centralized oversight, and the framework for eligible collateral. Company representatives welcomed the proposed expansion of the DLT Pilot Regime but expressed concern about volume thresholds, which they argue continue to deter institutional market participation.
Circle recommends that the EU adopt adaptive thresholds, which would consider factors like market penetration, liquidity, and the outcomes of supervisory reviews. Such a move would allow the framework to evolve as market conditions change, rather than locking in fixed limits that may quickly become outdated.
The current plan requires the European Securities and Markets Authority (ESMA) to issue a report on the pilot by 2030, but it does not provide detail on next steps beyond that date. Circle sees this as a risk for long-term investment, urging EU policymakers to map out a clear path from pilot programs to lasting regulation, which could boost confidence among infrastructure providers.
Challenges For Euro-Denominated EMTs And Access To Settlement Infrastructure
On the subject of EMTs, which are used for settlement in securities trades, Circle has voiced support for their recognition under MiCA but warns against limiting settlement access to only “significant” EMTs. No euro-denominated EMTs currently satisfy this significance threshold, creating what Circle identifies as a major barrier to their future growth.
In its statement, Circle noted the following:
Restricting settlement via central securities depositories to ‘significant’ EMTs risks excluding euro-denominated EMTs, essentially creating a circular problem that prevents their market development.
The company further suggests the CSD Regulation should be harmonized with the DLT Pilot Regime, allowing authorized Crypto-Asset Service Providers—not just credit institutions and central securities depositories—to manage cash accounts for the purpose of settlement.
Circle argues that this extension would align with guidance from the European Banking Authority and open the way for greater competitive participation in the settlement process.
Supervisory Models And Legislative Changes For Collateral Use
When it comes to market supervision, Circle favors a focused approach. The company believes ESMA oversight should be reserved for large, cross-border crypto service providers that could present real systemic risk. For less significant institutions, national authorities are viewed as better placed to provide agile and effective regulation.
Circle also highlights that the current regulatory patchwork—where businesses face oversight from multiple EU bodies—could undermine objectives of efficiency and growth if new layers of supervision are added without coordination. Streamlined arrangements focused on the major actors could help reduce administrative complexity, according to the company’s remarks.
On collateral frameworks, Circle calls for new legislation that would make EMTs formally eligible as collateral under EU law. Drawing attention to parallel initiatives by U.S. and UK regulatory bodies, Circle suggests that updating the European Market Infrastructure Regulation would prevent the EU from lagging behind other advanced jurisdictions in digital asset adoption.
