The European Commission’s review of its crypto rules closed on September 30, giving the EU a clearer picture of where MiCA is working and where the market has moved beyond it. The review began in May and was extended from August 31 to September 30. The Commission will use the responses for a report on MiCA and could attach a legislative proposal if it decides the rules need to change.
Circle says MiCA has licensed stablecoins without making them global
Circle’s submission exposes the gap between regulatory success and market success. The company said around 30 e-money tokens are now authorized under MiCA, yet only USDC, USDG and EURC of the world’s top 25 stablecoins by market value are covered by the EU framework. Circle describes itself as the largest MiCA-authorized e-money token issuer and says its two years operating under the rules give it a direct view of where the system works and where it is holding the market back.
Circle has submitted its response to the European Commission’s MiCA Review Consultation.
Our feedback draws on two years of experience operating USDC and EURC under MiCA, with a focus on strengthening Europe’s role as a dynamic, liquid stablecoin market.
In the response, we…
— Circle (@circle) October 1, 2026
Two years into the rules, Circle’s latest submission raises a different question: has compliance made EU stablecoins competitive enough in the global market? Circle’s Patrick Hansen described the company as the first major global stablecoin issuer to comply with MiCA in July 2024.
Also, Circle wants the Commission to change several parts of the framework. One proposal would allow an EU entity and a foreign affiliate to issue the same fungible token. The company also wants changes to the rules on reserves, including the 35% limit on exposure to a single sovereign and the 1.5% limit linked to a bank’s assets.
The reserve rules are a particular concern for Circle because of what happened to USDC during the March 2023 banking crisis. About $3.3 billion of Circle’s reserves were held at Silicon Valley Bank when the bank collapsed. Circle now argues that forcing large stablecoin issuers to keep too much money in bank deposits can create risks of its own.
European central banks see the same reserve issue differently. The ECB and national central banks are concerned that stablecoin reserves could leave banks much faster than normal deposits during a crisis. Rather than relying mainly on fixed limits for bank deposits, they want the rules to place more weight on how quickly reserve assets can be turned into cash.
Related: ESMA Launches Review of Crypto Custody Security Across Europe
Aave and ESMA are now fighting over who should carry the DeFi rulebook
ESMA’s September 30 submission asks the Commission to create clearer tests for deciding whether a service is genuinely decentralized. It also wants a new regulated crypto service for firms that give users access to DeFi protocols, alongside rules for staking, lending and borrowing.
Users can access DeFi without dealing with the protocol itself. A company can run the app or website that connects users to a DeFi protocol, while the lending or trading happens through smart contracts in the background. Aave CEO Stani Kulechov’s position draws the line somewhere else. His submission argues that regulation should follow control.
We submitted our response to the MiCA consultation.
Onchain finance brings access and transparency that legacy financial rails lack today.
The future of European finance should be built on DeFi, stablecoins, and tokenization, unlocking better financial rails for millions of… https://t.co/Stk3IQjIhl
— Stani (@StaniKulechov) October 2, 2026
If an identifiable person controls users’ assets or has ongoing power to decide who receives a service and what terms apply and how assets are used, that person can be regulated. But if users sign their own transactions and the protocol runs according to code, Aave argues that the open-source software itself should not become a licensed financial service.
The EBA has already asked the Commission to consider rules for crypto lending and for companies that give users access to decentralized lending protocols. It says lending and borrowing activity is already taking place in at least 16 EU member states.
In another development, the MiCA Crypto Alliance launched a new search tool that allows users to quickly verify whether a crypto company is authorized to operate under the MiCA framework.
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