TLDR
- Circle’s EU policy chief warns that stablecoin providers may need two separate licenses for identical activities starting March 2026.
- Patrick Hansen identified conflicts between MiCA regulations and the Payment Services Directive that create duplicate licensing requirements.
- The regulatory overlap affects businesses handling e-money tokens across all 30 European Economic Area member states.
- Circle CEO Jeremy Allaire supported Hansen’s assessment and called it a critical moment for regulatory simplicity in Europe.
- Hansen proposed extending transition periods until 2027 and amending Payment Services Directive 3 to eliminate the overlap.
Circle’s EU policy director has raised concerns about the overlapping nature of crypto regulations in Europe. The company warns that stablecoin providers may need two licenses for identical activities. This regulatory conflict could begin affecting businesses by March 2026.
Circle Identifies Regulatory Overlap in EU Framework
Patrick Hansen serves as Circle’s Senior Director of EU Strategy and Policy. He posted his concerns on X on October 31 about unresolved regulatory conflicts. Hansen stated that businesses handling e-money tokens may soon face dual licensing requirements.
The issue involves overlapping rules between MiCA and the Payment Services Directive. Circle’s policy chief explained that firms could need both a MiCA service provider license and a payment services license. These requirements would apply to the same custody and transfer activities.
Hansen argued that this arrangement contradicts the original purpose of MiCA regulations. The framework was designed to create unified rules for crypto assets across Europe. Instead, the current interpretation creates duplicate requirements for stablecoin service providers.
Circle employs Hansen to lead its regulatory strategy throughout European markets. The company issues euro-denominated stablecoins across the region. Circle has invested resources in understanding and complying with EU crypto regulations.
Dual Authorization Requirements Could Affect Market Operations
Hansen warned that service providers might withdraw from certain activities under dual licensing. Crypto-asset service providers could stop offering custody and transfer services altogether. This withdrawal would directly impact the adoption rates of euro stablecoins across Europe.
The policy director stated that complex regulations might prompt users to turn to unregulated crypto assets. He emphasized that the situation violates EU principles of proportionality and legal clarity. Hansen’s analysis draws from current European Banking Authority guidance documents.
Circle CEO Jeremy Allaire supported Hansen’s assessment on the same day. Allaire called the situation a critical moment for regulatory simplicity in Europe. He founded Circle and currently leads the company’s global stablecoin operations.
Multiple firms have worked to secure MiCA licenses for European operations. These companies aim to operate across all 30 member states of the European Economic Area. Gate Technology recently received MiCA approval in Malta under the new framework.
Hansen proposed two solutions to address the regulatory overlap between directives. The first solution involves extending transition periods for existing service providers until 2027. This extension would help companies avoid the March 2026 compliance deadline.
The second proposal calls for amendments to the Payment Services Directive 3 legislation. Hansen suggested adding specific carve-outs or cross-references to the directive. These changes would place e-money token activities exclusively under the supervision of MiCA.