Hyperliquid and Circle Push EU to Rewrite MiCA's Rules on Perps and Reserves

Two of the most consequential submissions to the European Commission's MiCA review arrived in the final days before the September 30 deadline: one from the Hyperliquid Policy Center arguing that crypto perpetual futures belong under MiFID II, and one from USDC issuer Circle targeting the regulation's bank deposit floor for stablecoin reserves. Together they frame what the MiCA revision debate will look like heading into 2027, and both carry direct implications for how firms classify instruments on their books and how stablecoin reserve accounting works under EU law.

The MiCA Review Consultation: Who Filed and Why It Matters

The European Commission opened its MiCA review consultation on May 20, initially setting an August 31 closing date before extending it to September 30. The review is a formal exercise that feeds into any future legislative amendment of the Markets in Crypto-Assets Regulation, which has been in full effect since late 2024. Responses from regulated entities, trade associations, and standard-setters carry real weight: the Commission has cited industry input in previous impact assessments and the review's scope explicitly covers stablecoin reserve rules, DeFi perimeter questions, and the treatment of derivatives.

Among the final-day filers were German exchange operator Deutsche Börse Group, which submitted on September 29, and tech advocacy group Chamber of Progress, which submitted shortly before the deadline. The Hyperliquid Policy Center (HPC) and Circle filed on September 30 itself.

Why the timing of these submissions matters for compliance teams

The consultation record becomes source material for any Commission impact assessment, and positions staked here tend to anchor the technical drafting that follows. Firms building MiCA compliance frameworks now are, in effect, building to a regulation that may be amended. Knowing which arguments have formal Commission attention helps finance and legal teams flag where rules could shift and where to avoid locking in approaches that may need to be rebuilt.

HPC's Case: Perps Under MiFID II, Not MiCA

The Hyperliquid Policy Center was established with one million tokens from the Hyperliquid Foundation, valued at roughly $29 million at the time. Its September 30 EU submission is the group's first regulatory filing outside the United States, and its lead argument is straightforward: crypto perpetual futures are derivatives and should be regulated under MiFID II, the EU's existing financial instruments framework first enacted in 2014, not under MiCA.

HPC CEO Jake Chervinsky signed the letter. The central legal principle is that classification of a financial instrument "should follow the economic features of an instrument, and the ledger on which it is recorded should not be determinative." The fact that perpetual futures trade on public blockchains rather than traditional venues does not, in HPC's reading, change what they are economically.

The MiFID II Annex I argument

HPC contends that MiFID II's Annex I already lists derivative categories broad enough to capture perpetual futures as they currently function. On that reading, no new legislation is required: the Commission needs only to issue clarification confirming that perps fall within those existing categories. "Clarity in application, rather than new legislation, is what would assist in regulating perpetual futures," the filing states.

The group also pushes back against any move to classify perps alongside contracts for difference (CFDs). ESMA restricted CFDs for retail clients in 2018 on the grounds that the structure creates a direct conflict of interest between provider and client. HPC argues perps on an order-book venue are structurally different: the trading venue is not itself the counterparty to every trade, so the same conflict does not arise. Lumping the two together, the filing argues, would import the wrong regulatory logic.

Transparency requirements HPC is asking for

Even while arguing that MiFID II already covers the product, HPC asks the Commission to require that trading venues publish their funding rate methodologies, maintenance margin levels, and liquidation thresholds in advance. That transparency ask is notable because it mirrors what most professional trading desks already demand contractually from prime brokers. Codifying it in regulation would raise the floor for all venues.

HPC also asks the Commission to confirm that listing a regulated product on a public blockchain does not, by itself, alter its regulatory classification. The filing points to Hyperliquid's HIP-3 market architecture as an illustration: a regulated firm can set leverage limits and restrict access through an onchain allowlist while still offering the product to clients as a regulated instrument.

Accounting implications for derivatives classification

For accounting teams, the classification question has direct balance-sheet consequences. A perpetual futures position treated as a derivative under MiFID II sits in the derivatives book and is measured at fair value through profit or loss under IFRS 9 or ASC 815. A position reclassified under a different MiCA category could attract different recognition, measurement, or disclosure requirements. Firms with EU clients trading perps on any venue should track this consultation outcome closely and document the classification rationale in their working papers now, before any Commission guidance lands.

Circle's Reserve Reform Agenda: Scrapping the Deposit Floor

Circle has issued its dollar-pegged USDC and its euro-pegged EURC through its French entity since July 2024 and describes itself as the largest e-money token (EMT) issuer authorised under MiCA. Its September 30 submission focuses heavily on the regulation's stablecoin reserve requirements, which it argues create the opposite of the stability they are designed to deliver.

The bank deposit floor and why Circle wants it gone

MiCA currently requires EMT issuers to hold at least 30% of reserves in commercial bank deposits. If the European Banking Authority designates a token "significant," that floor rises to 60%. Circle's submission argues this structure "increases exposure to the credit and counterparty risk of the banking sector" rather than reducing systemic risk.

Circle's institutional memory on this point is acute. In March 2023, USDC temporarily lost its dollar peg after Circle disclosed that $3.3 billion of its roughly $40 billion in reserves was held at Silicon Valley Bank, which had collapsed. A mandatory bank deposit floor would have made that exposure larger, not smaller, for a token classified as significant under MiCA's own criteria.

Notably, Circle is not alone in this position. The European Central Bank and the national central banks forming the European System of Central Banks (ESCB) have also called for removing the deposit minimums, proposing instead that a defined share of reserves mature within one to five working days. Circle's submission says it "concurs with the ECB" and advocates for replacing the floor with a liquidity-based minimum requirement tied to maturity rather than deposit type.

EBA technical standards in Circle's sights

Two provisions from the EBA's implementing technical standards also draw Circle's fire. The first caps an issuer's exposure to any single sovereign at 35% of reserves. Circle says this makes it "impossible" for a dollar-denominated token to hold predominantly US Treasurys, which is the de facto reserve composition for the largest dollar stablecoins globally. The second caps exposure to any single bank at 1.5% of that bank's total assets, a constraint Circle says would force large issuers to maintain reserve relationships with dozens of separate banks, adding operational complexity and counterparty fragmentation rather than reducing risk.

Multi-issuance: Circle's structural lifeline

Circle's other priority is preserving multi-issuance, the arrangement under which a MiCA-authorised EU entity and a foreign-regulated affiliate co-issue the same global stablecoin. According to Circle, this is currently the only mechanism that allows a token like USDC to operate inside MiCA's perimeter at all while also functioning globally. If multi-issuance were restricted, Circle argues, usage would shift outside the EU's regulatory perimeter entirely, a scenario the Commission's own 2020 MiCA impact assessment warned about when it concluded that banning foreign stablecoins would push EU users toward offshore alternatives without MiCA's consumer protections.

The ESCB's own submission takes a more cautious line, calling for "legal clarification" on whether third-country multi-issuer schemes are permissible under MiCA as written. That gap between the ECB's position on reserve composition and the ESCB's position on multi-issuance is itself a live tension within EU institutions that the review will need to resolve.

Stablecoin accounting under current and proposed rules

For MiCA compliance crypto teams and their auditors, the reserve composition question is not just a regulatory one. Under IFRS, the classification of reserve assets held by an EMT issuer affects how those assets are recognised and measured. Sovereign debt held at amortised cost, bank deposits, and short-dated money market instruments each attract different accounting treatment, different impairment regimes, and different disclosure requirements under IFRS 7 and IFRS 9. A shift away from the current deposit floor toward a liquidity-maturity test would require issuers and their auditors to revisit reserve asset schedules, fair value hierarchies, and the credit risk disclosures in their financial statements.

For firms using USDC or EURC in treasury operations or as settlement assets, the stability of the peg matters directly to the measurement of holdings at period end. Any change to reserve rules that affects the issuer's liquidity profile feeds through to the risk assessment that underpins that measurement.

Other Significant Submissions: Deutsche Börse and Chamber of Progress

Deutsche Börse Group filed the day before the deadline. Its submission proposes a dedicated regulatory category for "settlement EMTs," stablecoins used as the cash leg in regulated settlement systems. The group's concern is specific: settlement fails in securities markets can cascade rapidly, and applying EMT rules designed for retail payment tokens to settlement infrastructure without modification creates operational risk. Deutsche Börse, which earlier this year agreed to acquire the parent company of the exchange Kraken, has a direct commercial interest in how tokenised settlement infrastructure is regulated.

Chamber of Progress, a technology industry advocacy group, backed preserving multi-issuance with enforceable EU redemption rights and argued that consumers should be able to earn rewards on e-money tokens. MiCA's current interest ban prevents EMT issuers from paying yield on balances, a restriction that Chamber of Progress says disadvantages EU-regulated tokens relative to offshore alternatives that carry no such constraint.

What Compliance and Finance Teams Should Do Now

For accounting firms and CFOs advising EU-facing clients

The consultation record is now closed, but the Commission's analytical work continues. Firms advising clients on MiCA compliance should treat the current rules as the operative framework while flagging to clients that the reserve composition requirements and the derivatives classification perimeter are both formally under review. Any internal policy or accounting methodology built entirely around the 30% bank deposit floor should be documented as subject to revision. Where clients hold or issue stablecoins, the reserve asset schedule and its accounting treatment should be reviewed against both current MiCA requirements and the proposed liquidity-based alternative, so the delta is already understood when a final position emerges.

For firms with derivatives desks or DeFi exposure

The HPC filing crystallises an argument that perps are already MiFID II derivatives. If the Commission accepts that reading, EU-licensed venues offering perps will be subject to MiFID II reporting (transaction reporting under Article 26, best execution under Article 27) rather than any future MiCA derivatives category. Firms running internal or client perps positions should have a documented classification rationale in their compliance and accounting files. If the position is currently treated as a crypto-asset under MiCA, a reclassification to a MiFID II derivative would affect hedge accounting eligibility, margin accounting, and netting disclosures.

The Commission has not indicated a timeline for publishing its analysis of the consultation responses, but given that the MiCA review feeds into any legislative proposal, material changes are unlikely before 2028 at the earliest. The window for firms to engage through trade associations or direct representation closed on September 30. The next meaningful output will be the Commission's summary of responses and any accompanying impact assessment.

Source: The Block

Frequently Asked Questions

What is the HPC asking the EU to do with crypto perpetual futures?

The Hyperliquid Policy Center is asking the European Commission to confirm that perpetual futures are already covered by MiFID II's existing derivative categories and should not be brought under MiCA or treated as contracts for difference. No new legislation is needed, HPC argues: clarity on existing rules is sufficient.

Why does Circle want to change MiCA's reserve rules?

Circle argues that forcing e-money token issuers to keep 30% to 60% of reserves in commercial bank deposits increases, rather than reduces, counterparty risk. It experienced this directly during the Silicon Valley Bank failure in 2023. Circle supports replacing the deposit floor with a liquidity requirement based on asset maturity, a position also taken by the European Central Bank.

What is multi-issuance and why does it matter for MiCA compliance?

Multi-issuance is the arrangement where a MiCA-authorised EU entity and an affiliated non-EU entity co-issue the same stablecoin. Circle says this is currently the only way a globally circulating token like USDC can operate inside MiCA's perimeter. A ban would push usage outside EU regulatory oversight, which the Commission's own 2020 impact assessment warned against.

How does the reserve rule debate affect stablecoin accounting under IFRS?

Reserve asset composition directly affects how an EMT issuer classifies and measures assets under IFRS 9, the impairment model applied, and the credit risk disclosures required under IFRS 7. A shift from a deposit-based floor to a maturity-based liquidity test would change which assets qualify, potentially altering fair value hierarchies and the risk disclosures in audited financial statements. Firms holding or issuing MiCA-regulated stablecoins should model the accounting impact of both the current and proposed reserve frameworks now.

What did Deutsche Börse propose in its MiCA review submission?

Deutsche Börse called for a separate regulatory category covering stablecoins used specifically as the cash leg in regulated securities settlement systems. It warned that applying standard EMT rules to settlement infrastructure without adaptation creates the risk of cascading settlement failures, given the speed and interconnection of securities markets.