Circle calls on EU to accelerate DLT reform and relax stablecoin settlement rules

Stability coin issuer Circle called on the EU to speed up the reform of the digital asset regulatory framework, arguing that the current progress may slow down the pace of institutional adoption of tokenized markets. In feedback on the EU's "market integration plan", Circle said that the plan is an important step in modernizing the capital market, but there are still deficiencies in terms of scalability, regulatory mechanisms and settlement rules. Circle supports optimizations of the distributed ledger technology (DLT) pilot framework, including expanding the range of assets that can be included and increasing transaction size caps, but notes that existing restrictions still inhibit liquidity and institutional participation. The company recommends introducing a "dynamic threshold" mechanism that allows regulatory parameters to be automatically adjusted based on market developments, rather than relying on periodic legislative updates. At the same time, Circle called for a clear transition path from the pilot phase to a formal regulatory system. In addition, Circle emphasized that the pace of relevant reforms should be accelerated, warning that slow progress in regulation may lead to the transfer of tokenized financial activities to faster-growing markets such as the United States.