- Circle has urged European regulators to accelerate updates to the bloc’s digital asset regulation, warning that delays could slow institutional adoption of tokenised markets.
- While backing proposed reforms, the company called for more flexible rules and faster implementation to prevent stifling innovation.
USDC stablecoin-issuer Circle has expressed its support for financial services reforms proposed by the European Commission, but argued the regulator should fast-track rules around a pilot of distributed ledger technology (DLT) to “maintain the EU’s competitive edge.”
Circle submitted its feedback to the European Commission on March 20 in response to the regulator’s suite of legislative proposals designed to create a single market for financial services, known as the Market Integration Package, which affects 18 existing laws.
Circle said the Commission should consider progressing proposed DLT Pilot Regime updates in the package separately, to prevent delays that could hold the EU back, given the current lack of clarity.
Market participants need a clear, time-bound transition from a “pilot” phase to permanent sectoral legislation to justify long-term infrastructure investments.
Circle A key component of the Commission’s changes is freer rules around the EU’s DLT Pilot Regime, launched in 2023, which allows authorised firms to use tokenised digital assets for trading and settlement systems—but has seen little uptake so far.
Lewis McLellan from global finance think tank OMFIF said in late 2025 that the EU’s DLT pilot regime had “failed to deliver” with just three projects approved, which had hosted few live transactions. He blamed that on the regime’s design rather than a lack of interest.
The Market Integration Package introduced in December 2025 would amend regulation around piloting tokenised assets to “relax limits, increase proportionality and flexibility, and provide legal certainty, thus encouraging the adoption of new technologies in the financial sector,” according to the Commission.
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Circle: Package is “Pivotal Moment” for EU
Circle described the Market Integration Package as “a meaningful step toward a digitally enabled financial system,” but believes refinement is needed to keep the EU at the forefront of innovation.
In addition to accelerating DLT Pilot Regime updates, Circle argued that the pilot should incorporate an adaptive threshold mechanism to determine aggregate market values, based on predefined criteria including market uptake, liquidity conditions and supervisory assessments.
Related: Bundesbank Chief Backs Digital Euro and Stablecoins to Boost Payment Independence
Other feedback on the proposed legislation from Circle included:
- A suggestion of more permissive rules around MiCA-compliant e-money tokens (EMTs) for cash-leg settlements (CSDs) and who can provide EMT cash account services.
- Concerns about proposed reforms to transfer of the supervision of Crypto-Asset Service Providers to the European Securities and Markets Authority (ESMA), which Circle said “must be carefully calibrated.”
- A call to provide legal certainty for EMTs as collateral, including providing explicit confirmation of eligibility and ensuring international competitiveness.
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