Circle Seeks EU Reforms for Digital Assets in Market Integration Package

Circle, a prominent player in the digital asset space, has provided feedback to the European Commission's Market Integration Package. The company's submission, made on March 20, covers four key areas: DLT Pilot Regime, e-money token settlement, centralized supervision, and collateral frameworks.

In its recommendations, Circle advocates for adaptive thresholds based on market uptake, liquidity conditions, and supervisory assessments for the DLT Pilot Regime. This approach would provide clearer guidance for market participants while maintaining oversight. The company also emphasizes the need for a defined path from the pilot phase to permanent legislation, warning that without clarity, long-term infrastructure investment remains difficult to justify.

Regarding e-money tokens, Circle welcomes the Commission's recognition of MiCA-compliant EMTs but cautions against restricting settlement to 'significant' EMTs. The company warns that this restriction risks excluding euro-denominated EMTs and creating a structural barrier to their growth. As it stands, no euro-denominated EMTs meet the significance threshold.

Circle also recommends aligning the CSD Regulation with the DLT Pilot Regime on EMT cash accounts. Currently, access is restricted to credit institutions and CSDs; Circle proposes extending this access to authorized Crypto-Asset Service Providers, consistent with existing EBA guidance.