Circle is pressing the European Union to fast-track reforms to its distributed ledger technology framework and widen the scope of stablecoin settlement rules, arguing that current restrictions under the DLT Pilot Regime limit the competitiveness of euro-denominated digital assets in global markets.
TLDR Keypoints
- Circle is urging the EU to accelerate reforms to the DLT Pilot Regime, which governs how blockchain-based securities are settled across European markets.
- The company is specifically requesting that regulators widen settlement eligibility so stablecoins like USDC and EURC can be used as settlement assets for tokenized securities.
- Circle argues that current EU rules disadvantage euro-denominated stablecoins compared to competitors operating under more permissive frameworks in the US, UK, and Singapore.
Global Stablecoin Settlement Volume — 2024
$27 trillion+
On-chain stablecoin transactions surpassed Visa’s annual network volume in 2024, the scale driving Circle’s push for the EU to broaden DLT settlement rules under MiCA and the DLT Pilot Regime.
Source: Visa Onchain Analytics / The Block Research
Circle’s Specific Asks: DLT Pilot Expansion and Settlement Scope
Circle’s lobbying push centers on the EU’s DLT Pilot Regime, a regulatory sandbox launched in 2023 that allows financial market infrastructures to experiment with blockchain-based securities trading and settlement. The regime was designed to test how distributed ledger technology could integrate with traditional capital markets, but it operates under strict volume caps and limits on which financial instruments qualify.
The company is formally calling on EU regulators to expand the list of financial instruments eligible for stablecoin-based settlement within the pilot. Under the current framework, the pilot regime caps are too restrictive for meaningful institutional market activity, Circle has argued, effectively excluding stablecoins as viable settlement assets for securities transactions.
Circle’s position is that euro-denominated stablecoins, particularly its own EURC token, need regulatory parity with USD-pegged stablecoins that operate in more permissive jurisdictions like the US and UK. Without settlement-layer reforms, the company contends, EU-regulated venues cannot legally clear and settle tokenized securities using either USDC or EURC.
MiCA Daily Cap — Non-Euro Stablecoins in EU
€200M / day
MiCA imposes a €200 million daily transaction ceiling on non-euro-denominated stablecoins used for payments in the EU. Circle argues this cap effectively bars USDC from serving as a settlement asset under the DLT Pilot Regime and is pushing regulators to fast-track an amendment.
Source: EU MiCA Regulation (2023/1114), Article 23
Why MiCA Alone Is Not Enough: The Gap Circle Is Targeting
The Markets in Crypto-Assets Regulation, which took full effect in 2024, established comprehensive rules for stablecoin issuance and e-money token classification across the EU. However, MiCA governs issuance and payment use, not the settlement infrastructure that underpins securities markets.
The DLT Pilot Regime occupies a separate regulatory layer. It permits DLT-based securities settlement but with volume and instrument-type caps that were intentionally conservative at launch. Critically, the pilot rules do not explicitly authorize stablecoins as settlement assets for securities transactions, creating a gap that Circle is now targeting.
This distinction matters because institutional players looking to trade and settle tokenized securities on EU-regulated venues currently cannot use stablecoins for the cash leg of those transactions. The gap exists even though MiCA has given stablecoin issuers a clear licensing path, as Quant Network’s regulatory analysis has highlighted in reviewing Europe’s DLT adoption progress.
The competitive pressure is real. The UK has moved to back stablecoin settlement plans as part of its broader digital assets strategy, while Singapore and the US are advancing their own frameworks. Circle’s argument is that without matching reforms, the EU risks pushing institutional digital asset activity offshore, a dynamic already visible in traditional crypto spot trading as exchanges like Backpack expand token offerings in more permissive jurisdictions.
What Comes Next: EU Review Timeline and Industry Pressure
The European Commission is mandated to review the DLT Pilot Regime under the terms of the original regulation. That review, which assesses whether the pilot should be expanded, made permanent, or wound down, represents the most concrete legislative window for the reforms Circle is seeking.
Circle is not alone in pushing for broader DLT settlement rules. As OMFIF analysis has argued, the pilot regime can still deliver on its promise if regulators expand its scope to match the pace of institutional demand. Multiple industry bodies and financial infrastructure providers have echoed similar calls for wider instrument eligibility and higher volume thresholds.
Circle’s commercial motivation is transparent: EURC adoption depends on institutional use cases, and settlement is the highest-value use case in capital markets. The broader push toward institutional digital asset integration across traditional finance, including major exchange infrastructure upgrades, gives Circle’s argument additional weight.
The EU’s response will likely set the tone for how quickly European capital markets can adopt tokenized settlement at scale. With a packed regulatory calendar ahead, including ongoing MiCA implementation reviews and the pilot regime assessment, the next six to twelve months will determine whether Circle’s push gains traction or stalls in Brussels.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
