The European Union’s landmark crypto framework, MiCA (Markets in Crypto-Assets), is undergoing its first major review, and two heavyweights are stepping up to shape the outcome. The Hyperliquid Policy Center and Circle, the issuer of the USDC stablecoin, have both submitted formal filings to the European Commission arguing for important changes. Their submissions could redefine how perpetual futures and stablecoins are regulated across the bloc.
Why the MiCA Review Matters
MiCA, which came into full effect in 2024, was one of the world’s first comprehensive crypto regulations. It set rules for crypto asset issuers, service providers, and stablecoin issuers. But every major regulation needs a reality check, and the European Commission has opened the floor to feedback on what works, what doesn’t, and what’s missing.
Think of MiCA review as a report card moment. Regulators built the rules, watched how the industry reacted, and now they’re asking: Did we get it right? The answers from companies like Hyperliquid and Circle carry enormous weight, because they operate at the frontier of crypto markets.
Hyperliquid Wants Perpetual Futures Under MiFID II
The Hyperliquid Policy Center, the policy arm of the popular decentralized exchange Hyperliquid, is making a bold argument: perpetual futures (perps) should be classified under MiFID II, Europe’s existing financial markets framework, rather than left in a regulatory gray zone under MiCA.
For beginners, perpetual futures are a type of derivative that lets traders bet on the future price of an asset without an expiration date. They’re hugely popular in crypto but also controversial because of the risks they carry, including high leverage and liquidations.
Hyperliquid’s argument is essentially that perps behave more like traditional financial instruments than like Bitcoin or Ethereum. By placing them under MiFID II, the exchange believes they’d get clearer rules around transparency, leverage limits, and market manipulation protections. This would benefit retail traders, who often get burned when platforms operate without strong oversight.
What This Means for DeFi
Hyperliquid is a decentralized exchange (DEX), meaning it runs on blockchain smart contracts rather than a traditional company. Calling for MiFID II classification is significant because it suggests even decentralized platforms want regulatory clarity, not necessarily less regulation. It’s a sign that DeFi is growing up and asking to play by clear rules, even if those rules are strict.
Circle Pushes Back on MiCA’s Bank Deposit Requirement
Meanwhile, Circle has its own concerns. The company behind USDC, the second-largest stablecoin by market cap, is challenging a specific MiCA rule: the requirement that stablecoin issuers hold a meaningful portion of reserves in EU bank deposits.
Stablecoins, for those new to the term, are cryptocurrencies pegged to a stable asset like the US dollar. The idea is simple: 1 USDC should always be worth 1 dollar. To maintain that peg, issuers hold reserves, usually in cash, short-term government bonds, and other safe assets. MiCA currently requires that some of those reserves sit in EU-based bank accounts.
Circle’s argument is that this requirement creates unnecessary friction. USDC reserves are primarily held in US institutions, and redirecting capital to European banks could introduce counterparty risk, reduce efficiency, and ultimately weaken the stability of the stablecoin. In short, Circle says the rule is well-intentioned but could backfire.
The Bigger Stablecoin Debate
This isn’t just a Circle issue. The stablecoin market is worth hundreds of billions of dollars, and how reserves are managed affects everyone who uses them, from traders on platforms like Kraken to everyday DeFi users. If reserve rules are too strict, innovation moves elsewhere. If they’re too loose, users risk losing their money when a stablecoin breaks its peg, as happened with Terra’s UST in 2022.
Why Both Filings Matter for Crypto Users
Whether you’re a casual crypto holder or an active trader, these regulatory discussions will shape your experience in the EU. Here’s why:
- Clearer rules for perps mean better protection against fraud and unfair liquidations.
- Healthier stablecoins mean your USDC or other dollar-pegged assets are more likely to remain redeemable.
- Stronger compliance standards mean more trust from banks, payment providers, and institutions entering the space.
For anyone serious about securing their own crypto portfolio outside of centralized platforms, the rising importance of regulation is also a reminder to take self-custody seriously. Tools like the Ledger hardware wallet give you direct control over your private keys, so you never have to trust an exchange or a third party with your assets.
What Happens Next?
The European Commission will now sift through feedback from across the crypto industry. Expect lobbying not just from Hyperliquid and Circle, but from major exchanges like Bitvavo in Europe, traditional banks, and consumer advocacy groups. The final revisions to MiCA could arrive within the next 12 to 24 months.
Final Thoughts
The MiCA review is a pivotal moment for European crypto policy. Hyperliquid’s push to bring perpetual futures under MiFID II and Circle’s challenge to the bank deposit requirement are both signs of a maturing industry that wants rules, just the right rules. As a crypto user, the best move is to stay informed, diversify where you trade, and take personal custody of your long-term holdings. Regulation is coming, and it’s up to all of us to make sure it protects users without crushing innovation.
