Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteCircle has publicly asked the European Commission to rethink MiCA’s fixed bank-deposit minimums for stablecoin reserves. But the available primary sources do not confirm that Tether has endorsed Circle’s specific proposal or filed a matching response, so “common ground” should not be read as evidence of a joint position.
What MiCA requires stablecoin issuers to hold in bank deposits
For electronic money tokens (EMTs), MiCA sets a minimum share of reserve assets that must be held as deposits with credit institutions. The minimum is 30% for non-significant EMTs and 60% for significant EMTs, as summarized in Circle’s October 1, 2026 account of its consultation response and the European Systemic Risk Board’s 2025 report. The framework also includes rules on eligible liquid assets, liquidity, segregation and concentration.
| Rule or proposal | What it means |
|---|---|
| Deposit floor for non-significant EMTs | At least 30% of reserve assets must be held as bank deposits, under the framework described by Circle in its October 1, 2026 consultation summary. Circle’s summary |
| Deposit floor for significant EMTs | At least 60% of reserve assets must be held as bank deposits, under the same framework. ESRB report (2025) |
| Single-sovereign exposure limit | A 35% cap that Circle says should be removed. Circle’s summary |
| Bank-deposit concentration limit | A limit tied to 1.5% of an individual bank’s total assets, which Circle also says should be removed. Circle’s summary |
| Circle’s alternative | Replace the fixed deposit floor with a less rigid minimum asset-liquidity requirement. This is Circle’s proposal, not an adopted change to MiCA. Circle’s summary |
What Circle wants changed—and why
In a blog post summarizing its response to the European Commission’s MiCA review consultation, Circle says the deposit minimum should be reconsidered and replaced with a more flexible liquidity requirement. Circle argues that requiring a set portion of reserves to sit in bank deposits can increase exposure to bank credit and counterparty risk, rather than simply improving redemption readiness.
Circle also says the bank and sovereign concentration constraints can make it harder for issuers of currencies other than the euro to hold reserves predominantly in highly liquid sovereign assets. It argues that larger issuers may need relationships with numerous banks to comply. These are Circle’s stated concerns; they do not establish that the rules produce the same outcome for every issuer or that Circle’s proposed replacement would be safer in all conditions.
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The Circle page is authored by Patrick Hansen, the company’s Director of EU Strategy & Policy, and summarizes Circle’s consultation response rather than reproducing the full filing. Hansen’s post states: “We therefore concur with the ECB that this mandatory minimum deposit requirement should be reconsidered and replaced with a less rigid minimum asset liquidity requirement under MiCA.” Read Circle’s summary.
Why regulators see value in the deposit floor
The European Banking Authority (EBA) says the deposit requirement can support timely access to liquidity for redemptions and preserve bank funding. It considers MiCA’s requirements broadly appropriate for now and recommends leaving them unchanged until regulators have more experience applying them. The EBA also acknowledges that a careful cost-benefit analysis of lowering the minimum could be warranted.
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The EBA’s position is not that bank deposits are risk-free. It notes that rapid, large withdrawals could put pressure on banks, while problems at a bank could delay an issuer’s access to reserves or lead to losses. Its consultation response summarizes its current view: “On the whole, the EBA considers the requirements broadly appropriate and suggests the requirements should remain unchanged until greater experience has been acquired with their application.” This is the authority’s response to the consultation, not a final legislative decision. Read the EBA response.
Would a liquidity rule be safer than a bank-deposit minimum?
Neither approach eliminates risk; each affects how reserves can be accessed and how stress may spread. The ESRB describes two potential channels: issuers may need to withdraw bank deposits or sell reserve securities to meet redemptions. Deposits can provide accessible liquidity, but rapid withdrawals may affect banks. Securities sales can put pressure on market prices.
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That makes the question broader than whether reserves are “liquid” in normal conditions. A sound assessment also has to consider how quickly assets can be converted to cash during heavy redemptions, how concentrated reserves are across banks and sovereigns, and whether many issuers might need liquidity at the same time. The ESRB’s analysis explains these system-wide trade-offs; it does not establish that Circle’s proposed alternative would outperform the current rules in a stress event. Read the ESRB report.
What the available evidence says about Tether
The evidence supports a narrow distinction: Circle has publicly stated its own proposals, but the primary sources reviewed do not establish that Tether submitted a matching response or endorsed Circle’s specific changes. Tether’s reserve composition and public history around European access are context, not proof of agreement with Circle. Without a direct Tether statement or filing on these provisions, it is not accurate to describe the two companies as having a confirmed shared position.
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The ESRB’s 2025 report described Circle as holding close to 90% of its reserves in Treasury bills, with an average duration of 12 days, and Tether as holding around 65% in those instruments. Those are figures reported in that 2025 analysis, not current reserve disclosures. The figures indicate different reported reserve profiles at that time; on their own, they do not show that Tether opposes MiCA’s deposit rules or agrees with Circle’s proposed replacement. ESRB report (2025).
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What happens next in the MiCA review
Circle’s post concerns a response to the European Commission’s consultation on the MiCA review. The sources cited here do not establish a confirmed decision date, a final legislative outcome, or that the deposit floors and concentration rules have changed. The EBA’s recommendation to retain the requirements pending more implementation experience is its consultation position, not a guarantee of what the Commission or EU lawmakers will decide.
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For context, the ECB reported that the market capitalization of MiCA-authorised euro-denominated stablecoins was around €450 million as of January 2026, compared with about €50 million at the beginning of 2024. Those figures concern authorised euro stablecoins, not the overall stablecoin market, and do not by themselves settle how reserve rules should be designed. Read the ECB analysis.
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