The Hyperliquid Policy Center and stablecoin issuer Circle have urged the European Commission to revise how the Markets in Crypto-Assets Regulation, or MiCA, handles two fast-growing parts of the market: perpetual futures and stablecoin reserves. Their submissions, filed by the Sept. 30 deadline for the Commission’s MiCA review, argue that rules designed for conventional financial structures could create mismatched requirements for onchain trading venues and euro-area stablecoin issuers.
The consultation opened on May 20 and had originally been scheduled to close on Aug. 31 before the Commission extended the deadline by a month. The responses arrive as European authorities consider whether MiCA’s first implementation phase has left gaps, particularly where crypto products overlap with existing financial-services law.
Hyperliquid group wants perps under MiFID II
The Washington-based Hyperliquid Policy Center asked the Commission to classify crypto perpetual futures as derivatives under the EU’s 2014 Markets in Financial Instruments Directive II, known as MiFID II, rather than treat them as crypto-assets regulated primarily through MiCA.
Perpetual futures, commonly called perps, are derivative contracts that allow traders to take leveraged positions without a fixed expiry date. They have become a major source of activity on centralized and decentralized crypto venues, yet their regulatory treatment can vary depending on the product design and the jurisdiction.
In a Sept. 30 letter, Jake Chervinsky, the organization’s executive director, argued that a financial instrument’s legal treatment should be based on its economic characteristics rather than whether it is recorded on a public blockchain. The group said the derivative categories listed in Annex I of MiFID II already encompass perpetual futures and that regulators could address supervision concerns by applying the existing framework more clearly.
The submission also asked the Commission to keep perpetual-futures venues distinct from the EU rules governing contracts for difference, or CFDs. The European Securities and Markets Authority imposed restrictions on CFDs offered to retail clients in 2018, including leverage limits and mandatory risk warnings.
According to the Hyperliquid Policy Center, the market structure differs materially. A CFD provider typically acts as the client’s counterparty, meaning the provider can benefit when the client’s position loses value. A perpetual-futures exchange or decentralized order book can instead match users’ orders without serving as the counterparty to each trade.
That distinction goes to the center of the group’s argument: applying CFD rules directly to a venue with a different execution and liquidation model could produce requirements that do not fit the underlying market.
The group proposed disclosure rules aimed at the mechanics that determine risk on perpetual venues. It asked for trading platforms to publish their funding-rate methodologies, maintenance-margin requirements and liquidation thresholds in advance. Funding payments are periodic transfers between long and short traders that help keep a perpetual contract close to its underlying reference price.
The filing also called on the Commission to confirm that placing an otherwise regulated product on a public blockchain does not automatically alter its legal classification. Such a clarification would give onchain platforms a more defined route into established derivatives rules while leaving product-level safeguards intact.
HIP-3 offers the group’s example
The Hyperliquid Policy Center cited Hyperliquid’s HIP-3 markets to illustrate its proposed approach. HIP-3 is designed to allow markets to operate on public infrastructure while using parameters such as leverage limits and an onchain allowlist to control access.
According to the group’s submission, HIP-3 markets accounted for 75% of Hyperliquid’s total trading volume in late July. That share subsequently declined to roughly one-quarter in recent weeks, indicating that the model’s early surge did not remain at the same level across the platform’s trading activity.
The policy organization was established in February and received 1 million HYPE tokens from the Hyperliquid Foundation, valued at about $29 million at the time of the donation. It described the European Commission response as its first policy filing outside the United States.
Circle targets reserve concentration rules
Circle’s response focused on MiCA’s framework for e-money tokens, the category that covers stablecoins designed to maintain a fixed value against a single official currency. The company issues USDC and EURC in the European Union through a French entity, a structure it has used since July 2024.
In a post outlining its submission, Circle said only three of the 25 largest stablecoins by market capitalization — USDC, USDG and EURC — are currently regulated under MiCA. Circle did not publish the full text of its response, limiting public detail on the precise legal language it proposed.
The company’s central request was to replace MiCA’s minimum commercial-bank deposit requirement with a liquidity-based approach. Under the current regulation, issuers of e-money tokens must hold at least 30% of their reserves as commercial-bank deposits. That threshold rises to 60% if the European Banking Authority designates a token under its size-based criteria.
Circle pointed to the banking turmoil of March 2023, when USDC temporarily fell below its $1 target after the company disclosed that $3.3 billion of approximately $40 billion in reserves was held at Silicon Valley Bank. The bank failed shortly afterward, exposing how a large deposit at one institution can become a source of stress even for a reserve-backed token.
The European Central Bank and national central banks in the European System of Central Banks have separately proposed removing mandatory deposit minimums. Their alternative would require stablecoin issuers to hold defined portions of reserves that mature within one and five working days, placing greater emphasis on the ability to meet redemptions quickly.
Circle also addressed two concentration limits in European Banking Authority technical standards. One restricts exposure to a single sovereign issuer to 35% of reserves. Another limits an e-money token issuer’s exposure to one bank to 1.5% of that bank’s total assets. Both measures seek to prevent reserve portfolios from becoming overly dependent on one government or one financial institution, though they can narrow the range of assets available to issuers.
Multi-issuance remains unresolved
Circle also called for the EU to retain multi-issuance structures, in which an EU-authorized entity and a foreign-regulated affiliate jointly issue the same stablecoin. This model can allow a token to circulate across jurisdictions while local entities handle regulatory responsibilities and redemption arrangements.
The European System of Central Banks has said MiCA requires legal clarification on whether third-country multi-issuer arrangements are permitted. The issue has practical consequences for globally used stablecoins: a restrictive interpretation could require separate EU and non-EU tokens, complicating liquidity and operational arrangements for users and issuers.
Other late submissions reflected similar concerns about MiCA’s interaction with market infrastructure. Deutsche Börse Group filed on Sept. 29 and proposed a separate category for “settlement EMTs,” which would be used as the cash leg of regulated settlement systems. The Chamber of Progress filed on Sept. 30, addressing restrictions on rewards linked to e-money tokens and conditions for multi-issuance arrangements that provide EU redemption rights.
The competing filings put the Commission in the position of deciding whether MiCA needs more tailored boundaries with existing derivatives law and more flexible reserve rules for stablecoins. The review is likely to shape whether EU regulation accommodates onchain market structures through targeted adjustments or requires them to fit more tightly into frameworks built for traditional intermediaries.
For deeper context on oversight of perpetuals beyond MiCA, explore our explainer on what perpetuals are and how they work.
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