Stablecoin issuer Circle has reportedly submitted its response to the European Insurance and Occupational Pensions Authority’s (EIOPA) consultation on technical advice for standard formula capital requirements for making investments in crypto-assets.
Circle is a global financial technology firm that enables businesses of all sizes to harness the power of digital currencies and public blockchains “for payments, commerce and financial applications worldwide.”
Digital assets firm Circle has confirmed in a blog post that it recently filed its response to the European Insurance and Occupational Pensions Authority’s (EIOPA) consultation on technical advice pertaining to the “standard formula capital requirements” for allocating investments / capital to digital assets.
As the crypto ecosystem continues to evolve, “ensuring that regulatory frameworks are both robust and innovation-friendly is crucial.”
EIOPA’s current draft advice reportedly “proposes a uniform 100% stress factor on all crypto-assets, a method that overlooks the varying risk profiles of different asset classes.”
Circle supports Policy Option 4, which emphasizes a “nuanced approach, particularly for tokenized assets like electronic money tokens (EMTs) authorized under the Markets in Crypto-Assets Regulation (MiCA).”
EMTs, fully backed by high-quality liquid assets, “present a significantly lower risk compared to other crypto-assets.”
Circle’s response reportedly highlights the “importance of aligning EIOPA’s advice with existing regulatory frameworks,” such as the Capital Requirements Regulation (CRR).
The CRR already incorporates a look-through “approach for EMTs, a methodology that ensures proportionality and that MiCA authorized EMTs can be adopted by financial institutions in the insurance sector.”
Circle concluded in its latest update that it “remains committed to collaborating with global regulators to shape a secure and inclusive future for digital finance.”
Circle Internet Financial, LLC is licensed as a Money Transmitter by the New York State Department of Financial Institutions and to engage in Virtual Currency Business Activity by the New York State Department of Financial Services.
