Circle urges EU to replace stablecoin bank-deposit mandates

With legislative crypto rulemaking stalled, Circle is taking its reserve fight directly to EU officials, urging them to replace stablecoin bank-deposit mandates while also seeking to preserve cross-border co-issuance and create a recognition route for tokens authorized elsewhere, The Defiant reports.

The mandate ties a token's backing to deposits held at banks, but The Defiant's account does not identify the EU instrument carrying the requirement, the supervisor administering it, or what Circle proposed in its place, nor whether officials have responded; it does report that central banks want stronger safeguards, setting monetary authorities against the issuer over how much of a stablecoin's reserves belongs inside the banking system.

The request lands as digital-asset rulemaking has moved off the legislature and onto agency staff and foreign supervisors, after the Senate's Clarity Act failed 49-50 and left market-structure definitions to the SEC and CFTC while the FCA's UK authorization window carries a February 28, 2027 continuity deadline for firms already operating there. An issuer that once waited on a statute now argues reserve composition, co-issuance and recognition jurisdiction by jurisdiction, and Circle's EU request is that pattern applied to the reserve side of the business.

For institutional users, the two secondary asks travel furthest. Cross-border co-issuance appears to be the mechanism by which one token is issued under more than one regulatory regime rather than re-papered market by market, and a recognition route would let a stablecoin authorized elsewhere be used in the EU without starting over. Neither is settled by the deposit question, and neither is described in the coverage as accepted or rejected; a mandate written at EU level would bind the category rather than a single issuer, so the answer bears on any firm weighing issuance in the bloc.

The coverage does not disclose Circle's reasoning, which leaves the reserve argument to be read from the two positions on the record: an issuer asking to replace a deposit requirement, and central banks asking for stronger safeguards. Whether the EU moves on any of the three requests is unconfirmed; the deposit language, if it changes, will change at the supervisors' hand.