Stablecoin issuer Circle has called on the European Union to accelerate reforms to its digital asset regulatory framework, warning that the current pace could slow institutional adoption of tokenized markets.
In its feedback on the EU's "Market Integration Package," Circle stated that the package is a significant step towards modernizing capital markets but noted shortcomings in scalability, regulatory mechanisms, and settlement rules.
Circle supports the optimization of the Distributed Ledger Technology (DLT) pilot framework, including expanding the scope of eligible assets and raising transaction size limits. However, it pointed out that existing restrictions still hinder liquidity and institutional participation.
The company proposed introducing a "dynamic threshold" mechanism, allowing regulatory parameters to adjust automatically based on market developments rather than relying on periodic legislative updates. Simultaneously, Circle called for a clear path for transitioning from the pilot phase to a formal regulatory system.
Furthermore, Circle emphasized the need to accelerate the pace of related reforms, warning that slow regulatory progress could lead to tokenized financial activities shifting to faster-developing markets like the United States.