Circle calls on the EU to accelerate DLT reforms and relax stablecoin settlement rules.

Stablecoin issuer Circle has called on the European Union to accelerate reforms to its digital asset regulatory framework, arguing that the current pace could slow institutional adoption of tokenized markets. In its feedback on the EU's "market integration plan," Circle stated that while it represents a significant step towards modernizing capital markets, it still has shortcomings in scalability, regulatory mechanisms, and settlement rules. Circle supports optimizing the pilot framework for distributed ledger technology (DLT), including expanding the range of assets that can be included and increasing transaction size limits, but points out that existing restrictions still inhibit liquidity and institutional participation. The company suggests introducing a "dynamic threshold" mechanism, allowing regulatory parameters to automatically adjust based on market developments, rather than relying on periodic legislative updates. Circle also calls for a clear path from the pilot phase to a formal regulatory system. Furthermore, Circle emphasizes the need to accelerate the pace of reforms, warning that slow regulatory progress could lead to a shift of tokenized financial activities to more developed markets such as the United States.