Stablecoins are no longer just a crypto story. They’re slowly becoming part of the wider financial system, and Europe now has to decide how open that system should be. That’s why Circle is pushing the European Commission to rethink parts of its proposed Market Integration Package, saying some of the rules could quietly limit how digital euro and dollar tokens grow in the region.
The company behind USDC and EURC has formally responded to the proposal, asking officials to lower certain barriers that affect how stablecoins are used in regulated markets. In its submission, Circle described the package as “a meaningful step toward a digitally enabled financial system,” but added that some thresholds and access limits may slow down real adoption.
At the heart of the issue is market access. Circle argues that if Europe wants tokenized assets and blockchain settlement to become part of mainstream finance, then euro and dollar stablecoins must be able to move more freely within regulated systems.
Jemi Motesho
EU Stablecoin Thresholds and the “Chicken and Egg” Problem
Under the EU’s current framework, stablecoins classified as e-money tokens face certain thresholds before they can be widely used in settlement. Only “significant” e-money tokens are allowed broader access to some parts of the financial system.
Circle says that creates a practical problem. If a euro-backed token is not yet large enough to meet the significance threshold, institutions may hesitate to use it. But without institutional use, the token may never grow large enough to qualify. The company has described this dynamic as a kind of chicken-and-egg scenario.
This matters directly to Circle because its euro-denominated stablecoin, EURC, falls under the EU’s definition of an e-money token but does not currently meet the threshold to be considered significant. Under the bloc’s main crypto rulebook, the Markets in Crypto-Assets Regulation, which came into effect in 2024, issuers must comply with strict requirements around reserves, disclosure, and supervision. Circle says it already complies with those rules but argues that additional settlement limits could hold back adoption.
Instead of relying on a fixed capital benchmark, the company has suggested more flexible criteria based on liquidity and actual market uptake. Circle wants regulators to look at how tokens are being used in practice, not just how big they are on paper.
Connecting Traditional Finance and Blockchain Settlement
The discussion is part of a broader push by the European Commission to modernize capital markets. The Market Integration Package, launched in late 2025, aims to deepen supervision and make it easier for financial systems across EU member states to work together.
Circle supports that goal. But it also says that if blockchain-based settlement is going to sit alongside traditional clearing systems, then crypto service providers must have a clearer role.
That brings in another piece of the puzzle: the EU’s DLT Pilot Regime, which allows market participants to experiment with distributed ledger technology in regulated trading and settlement environments. Circle has asked for crypto asset service providers to be included more fully in that regime, arguing that limiting certain cash accounts to credit institutions and central securities depositories narrows the field too much.
In Circle’s view, widening participation would give European firms more clarity about which digital assets can be used as collateral and how tokenized securities can settle on-chain within a regulated structure.
As Jeremy Allaire, the company’s CEO and co-founder, put it, “Stablecoins could drive the greatest acceleration of economic activity in human history.” That vision underlines why Circle is urging regulators to remove unnecessary barriers. Europe has built the rules. Now it must decide how open those rules should be if it wants to fully harness the potential of stablecoins for economic growth.
Jemi Motesho
