Circle urges the EU to accelerate DLT reforms and relax stablecoin settlement rules

Stablecoin issuer Circle calls on the EU to accelerate the reform of the digital asset regulatory framework, believing that the current pace may slow down institutional adoption of the tokenized market.

In feedback regarding the EU's "Market Integration Proposal," Circle stated that the proposal is an important step towards modernizing capital markets, but there are still shortcomings in scalability, regulatory mechanisms, and settlement rules. Circle supports the optimization of the distributed ledger technology (DLT) pilot framework, including expanding the range of assets that can be included and increasing the transaction size limit, but points out that existing restrictions still suppress liquidity and institutional participation. The company suggests introducing a "dynamic threshold" mechanism that allows regulatory parameters to automatically adjust according to market developments, rather than relying on periodic legislative updates. At the same time, Circle calls for a clear path for transitioning from the pilot phase to a formal regulatory system. Furthermore, Circle emphasizes the need to accelerate the pace of relevant reforms, warning that if regulatory progress is slow, it may lead to the migration of tokenized financial activities to faster-developing markets like the United States.