MiCA reserve changes and Circle USDC issuance

Circle demands liquidity-based reserve standards

Circle wants the European Commission to replace the 60% reserve requirement for significant e-money token issuers with a flexible minimum asset liquidity requirement. The company argues that mandatory bank deposits increase counterparty risk. In March 2023, $3.3 billion in USDC reserves sat at Silicon Valley Bank during its failure. This event showed how concentration in bank deposits creates risks for stablecoin holders when liquidity evaporates during market stress. Circle also wants to remove the 35% cap on single sovereign exposure and the 1.5% cap on individual counterparty bank deposits. These limits constrain the ability to build diversified, liquid reserve portfolios without adding safety. Circle urges the Commission to preserve multi-issuance structures. This arrangement allows an EU-authorised entity and a foreign-regulated co-issuer to jointly issue a stablecoin. The company maintains compliance with MiCA through a French e-money license. Current MiCA rules require e-money token issuers to hold at least 30% of reserves in commercial bank deposits. Smaller firms struggle with compliance costs, which range from €250,000 to €500,000 for licensing alone.

The ECB pushes for a risk-based framework

The European Central Bank and 27 national central banks demand the removal of the 60% reserve mandate. The European Central Bank and 27 national central banks demand the removal of the 60% reserve mandate because the rule forces large volumes of customer funds into the banking system at a time when the ECB manages excess liquidity. The Eurosystem wants a risk-based approach that scales requirements to the specific redemption risks of a stablecoin. This replacement mechanism could use principles from the Liquidity Coverage Ratio or the Net Stable Funding Ratio. On September 21, 2026, the ECB launched the Pontes settlement service to connect distributed ledger technology with central bank money. Eighteen institutions, including Deutsche Bank, Santander, and Societe Generale, joined the platform on its first day. This service allows for delivery-versus-payment settlement for tokenized securities. The ECB intends to use its own funds to invest in tokenized public-sector debt through this service. The 1 euro minimum denomination tests if the infrastructure handles micro-denominated securities without friction. The service connects DLT platforms with the existing TARGET2 system. Full implementation targets the year 2028. Will the Commission adopt these central bank recommendations?

Regulatory shifts for USDC and USDT

Circle holds a French e-money license and manages USDC with a $75 billion market cap. In July 2026, the company received final OCC approval for a national trust bank charter. Tether, the issuer of USDT, holds $183 billion and remains non-compliant with MiCA. Most EU exchanges restricted USDT for European users in 2025. You should check your service provider’s authorization status directly in the E-money token register.

The regulatory split creates a divide between US-regulated assets and offshore tokens. Circle uses dual issuance. To address US flows, Tether launched USAT in January 2026 via Anchorage Digital Bank. Article 23 of MiCA limits non-euro stablecoins to 200 million EUR in aggregate daily value if usage exceeds 1 million transactions per day. This cap applies to the issuer rather than the merchant. USDC reserves consist of cash and a government money market fund managed by BlackRock. Tether holds more than 146 tons of gold in its reserves.