Circle (USDC) Internet Group has called on EU regulators to overhaul the bloc's distributed ledger technology pilot framework, arguing the current rules are too rigid to support meaningful stablecoin adoption in capital market settlement.
The company submitted a response to the European Commission's April 2025 targeted consultation on EU capital markets integration, pushing for changes to settlement access, supervisory scope, and collateral rules.
Since the DLT Pilot Regime launched in March 2023, only three market infrastructures have received authorization - and even those have hosted few live transactions.
The Settlement Bottleneck
A core issue is cash settlement. Under the current pilot, only e-money tokens issued by credit institutions - not e-money institutions like Circle - can function as settlement assets. That restriction has kept MiCA-compliant stablecoins such as EURC out of on-chain settlement flows.
Circle welcomed the Commission's openness to recognizing e-money tokens for settlement, but warned that restricting access to "significant" tokens could inadvertently exclude euro-denominated stablecoins.
It also argued that cryptocurrency service providers - not only banks and central securities depositories - should be eligible to offer settlement accounts, reducing friction for non-bank operators.
The Commission's December 2025 Market Integration Package moved in this direction, proposing to expand eligible entities to authorized crypto-asset service providers and raise the activity cap from €6 billion to €100 billion.
Supervision and Collateral
Circle argued for tiered oversight, with ESMA's direct supervision reserved for large cross-border firms while smaller operators remain under national regulators.
The Commission went further, proposing ESMA as direct supervisor of all MiCA-licensed providers.
On collateral, Circle called for rules allowing stablecoins to qualify as financial collateral, citing parallel efforts in the U.S. - where the GENIUS Act, signed in July 2025, created the first federal stablecoin framework - and the U.K.
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The Commercial Backdrop
Circle holds a direct commercial stake in these reforms. It is the only major global issuer with both USDC and EURC fully MiCA-compliant, and EURC's market capitalization grew from roughly €70 million to over €300 million during 2025.
In September, Circle and Deutsche Börse Group signed an agreement to explore integrating both stablecoins into European trading, settlement, and custody flows.
The Market Integration Package now enters trilogue negotiations with the European Parliament and Council, with the legislative process expected to extend at least through end of 2026.
Circle did not immediately respond to Yellow's request for comment.
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