Circle Proposes MiCA Equivalence to Allow Tether's Return to Europe

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Circle’s EU policy head Patrick Hansen has proposed a MiCA equivalence framework to let stablecoins like Tether (USDT) operate in Europe without forming a local entity. The MiCA (EU Markets in Crypto-Assets Regulation) requires stablecoin issuers to set up EU-based companies, but equivalence would allow compliance under home jurisdiction rules. Tether, which holds most of its reserves in U.S. government debt, left EU exchanges to avoid MiCA’s 60% bank-backed reserve rule. The proposal could help Tether return without restructuring, though CFT (Countering the Financing of Terrorism) and regulatory hurdles remain.

Tether (USDT) walked away from Europe rather than follow its stablecoin rules. Now a top Circle executive has an idea that could bring it back.

The idea is called equivalence. It lets the EU accept the home rules a company already follows, with no separate EU coin needed.

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Why Most Stablecoins Skip Europe

MiCA is the EU’s rulebook for crypto. Its stablecoin rules reached their final deadline on July 1.

The rulebook has one big gap. It gives the EU no way to accept a foreign issuer’s home rules.

So any firm that wants EU users must first set up a licensed EU company. Patrick Hansen, Circle’s head of EU policy, calls that the hard way in.

By his estimate, about 99% of stablecoins are made outside the EU. That leaves the rules covering just a sliver of the market.

Overview table - Equivalence/adequacy decisions taken by the European Commission
Overview table – Equivalence/adequacy decisions taken by the European Commission. Source: European Commission
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“Equivalence is emerging as a compelling alternative to the multi-issuance model, currently the only possible regulatory pathway for these global stablecoins under MiCA,” Hansen stated.

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How this Could Bring Tether Back

Tether is the largest stablecoin. Its live market value is about $184 billion. MiCA tells big issuers to hold at least 60% of their backing in banks. Tether keeps most of its money in US government debt. So it let USDT get dropped by EU exchanges rather than change.

Equivalence would flip that. The EU could accept Tether’s home rules instead. USDT could then return with no separate EU coin.

But whose home rules? Tether is now based in El Salvador. It has not cleared the new US stablecoin law. It even built a separate US coin instead of changing USDT. A quick return looks unlikely.

USD Coin (USDC) took the other path. It won a French license in 2024 and stayed. Circle is already inside MiCA, so the change would help its rivals more than itself.

An Old Tool for a New Problem

Equivalence is not new. The EU already accepts foreign rules in insurance, banking, and other areas.

It cleared the UK’s clearing houses this way in January 2025. It has just never done it for stablecoins.

That would mean changing MiCA. The best chance is the review the EU opened in May 2026.

The politics are hard. Most big stablecoins are tied to the US dollar, and the EU is wary. Its central bank is even testing a digital euro.

For now, the door stays shut. The review will show if the EU wants to open it.

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