TBW - Dante Disparte (Circle): "MiCA Will Be to Crypto What GDPR Was to Privacy"

The Big Whale: The GENIUS Act passed with broad bipartisan support. The CLARITY Act is now entering committee markup. How do the two bills fit together?

Dante Disparte: You can't think about the CLARITY Act without the GENIUS Act. A European observer would get this intuitively: with MiCA, Europe has a single framework covering the entire crypto market — stablecoin issuers, market structure, the works. The GENIUS Act, by contrast, deals with one thing only: the issuance, redemption, and prudential supervision of stablecoin issuers. On its own, it would function as a kind of market structure bill, but leave everything else in the ecosystem unaddressed.

For Circle, the GENIUS Act is essential. The CLARITY Act is a nice to have — but a nice to have that matters. It covers crypto market structure in the broader sense: how exchanges operate, where to draw the line between digital assets that look like commodities and those that look like securities. All of that hinges on this bill moving forward.

Among the points still being negotiated is the question of yield and interest payments. Europe offers a useful preview of what the market could look like if those conditions change. Under MiCA, stablecoin usage centers on payments, programmability, composability, DeFi, and plenty of other use cases. Circle is the largest issuer of MiCA-compliant dollars and euros in Europe. I'm happy to say it.

The bill text just dropped today (Tuesday, May 12 — Ed.). Over 300 pages, so there's a lot to digest. But the fact that this debate is happening in the right committees is encouraging, even if the bill is likely to be more contentious than the GENIUS Act was at the outset.

Could the midterm elections slow the CLARITY Act down?

Critical question. People tend to project partisan lines onto crypto. Banks on the Democratic side, crypto on the Republican side. Our belief with the GENIUS Act was that it was a national interest bill, not a bill serving one party or one industry. 108 Democrats voted for it.

We hope to see the same bipartisanship around the CLARITY Act. But right now, it's becoming a more polarizing topic. You can see it in the press: the banking lobby rallying opposition, the White House crypto adviser saying he invited banks to meetings and they didn't show up. As Thursday's markup approaches, the mood is more tribal. We're hopeful that Senator Tim Scott, who chairs a committee with a strong bipartisan track record, will produce a bill that shows more convergence than divergence.

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What's missing from the CLARITY Act, in your view?

My answer is going to be a little frustrating. The proposed text came out this morning at 306 pages. Even with the best AI in the world, I haven't had time to read it all. And I don't want to give you an artificial intelligence answer. I want to give you an intelligence answer, period.

What I can say at this stage: the issues being negotiated are major. Yield, conflicts of interest, ethics, and above all, the division of authority between the SEC, the CFTC, and federal banking regulators. Once the bill is public, each side will file amendments. What comes out of committee on Thursday could look very different from the version published today.

What regulatory hurdle is still holding back global stablecoin adoption?

I've said this publicly: if you're an institution interacting with a stablecoin and you feel there's a lack of legal, accounting, or regulatory clarity, it's because the issuer chose not to get regulated. MiCA made that obvious at the European level. Circle made the right call — we didn't run away from Europe, we ran toward France. For two years now, we've been operating as an electronic money institution across the entire EU.

What regulators still need to settle is which rules apply. Our position: the country of the underlying currency should be the reference regulator. If you want euro-denominated stablecoins to grow, the EU needs to speak with one voice. Yet from this side of the Atlantic, what I mostly see are internal tensions over which digital money model to favor. Europe is scoring own goals — not against the market, but against itself.

"We didn't run away from Europe — we ran toward France"

Is Washington setting the global standard, or is Europe holding its own line with MiCA?

MiCA is a genuine step forward. It's probably the first time in my career that a European regulatory framework has actually delivered the intended competitive effect. I've been saying it for a long time: MiCA will be to crypto what GDPR was to privacy. Put differently, MiCA will pass the competitiveness test laid out by Mario Draghi.

The facts speak for themselves. More than 20 electronic money token issuers are operating in Europe — banks, non-banks, local players, international ones. A real competitive market has formed. Total euro stablecoin circulation has just crossed the billion mark. Circle is the leading player, but not the only one. We encourage rules-based competition.

What worries me is that some of the political rhetoric around MiCA, particularly from central banks, isn't constructive. And if it isn't corrected, it risks harming the European banking system itself.

Christine Lagarde recently expressed concern about European bank deposits migrating to stablecoins. Your reaction?

It raises a serious question. Europe doesn't like dollars, and apparently doesn't like euros either. Yet under MiCA, both strengthen European bank balance sheets. So what is it? Do you want this asset class in the EU, or don't you?

Second point: if you don't like euro stablecoins, then you don't like European electronic money. Because a stablecoin in Europe is an electronic money innovation. Criticizing MiCA-compliant stablecoins amounts to criticizing European electronic money itself.

The contrast with the United States is striking. Over there, banks worry that stablecoins will drain their deposits. In Europe, it's the opposite: MiCA requires issuers to partner with banks. Circle alone has billions of dollars sitting in the European banking system. The more you undermine MiCA for domestic political reasons, the less European banks will benefit from a framework that has already proven its competitive value.

EURC accounts for roughly 1% of your business compared to USDC. Is MiCA actually working, or has it mostly created compliance costs without real market depth?

EURC has €386 million in circulation. Total euro stablecoin supply just crossed the billion mark. Why not more? That's for the market to decide, not me.

Two important things to keep in mind. First, it's a late start: MiCA will celebrate its second anniversary in July. Second, the growing interest in euro stablecoins aligns with several points Madame Lagarde raised in her recent speech in Spain. But the paths to getting there will look different.

If you want to internationalize the euro and boost its competitiveness, you need to let MiCA's legal clarity take root. But in Brussels, the friction between banks, central banks, and non-bank players is constant. My view: MiCA has a scheduled revision in 2027. Let the lawmakers do their job and let the market pick the winners — not central bankers.

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Your position on central bank digital currencies?

No CBDCs. It's on the wrong side of history. Imagine the European Aviation Safety Agency flying planes and building engines. If you want monetary choice without running a science experiment with taxpayer money, you need regulated private competition. Full stop.

The United States made that choice with the GENIUS Act, which rules out any Fed-issued central bank digital currency. Europeans risk — and I've said this to the French Ministry of Finance — building a monetary Minitel if they lock themselves into an all-CBDC model.

"Would you want a tokenized deposit issued by Credit Suisse?"

The CLARITY Act allows banks to issue their own stablecoins. JP Morgan, BBVA, Deutsche Bank… They have the balance sheets and the distribution. Why would USDC win?

Just because you can do something with technology doesn't mean you should. If you and I wanted to get into AI, we wouldn't go build our own large language model. Same logic applies to banks.

The GENIUS Act sets two important guardrails. First, a bank can't launch a stablecoin from its main balance sheet. It needs a separate entity — one that looks more like Circle than a bank. Which raises a simple question: why would a bank want to lock up billions in reserves without generating any credit or lending?

The banks that have succeeded, in my view, are the ones that partnered with stablecoin issuers. Their balance sheets grew as our circulation increased. It's a better model: no need to recreate liquidity or demand from scratch, and they serve as on- and off-ramps for global stablecoin activity. Circle works closely with banks around the world. In Europe and the US alike, the rules are clear: banks can compete with issuers, but that doesn't mean they should.

Under MiCA, banks can issue stablecoins that may also resemble tokenized deposits. What's your take?

Let me flip the question: would you want a tokenized deposit issued by Credit Suisse?

A stablecoin — in Europe or the US — rests on clear principles: full reserves, bankruptcy remoteness, prudential supervision, complete transparency, par-value redemption at any time. A tokenized deposit is something else entirely. It's a digital twin of the bank's balance sheet, with its maturity transformation, its lending, and its leverage. When it comes to regulation, the principle is "same risk, same rules." But a tokenized deposit doesn't carry the same risk as a fully reserved stablecoin. It's a different product.

And in practice, most banks working on tokenized deposits plan to use them internally, on permissioned ledgers. JP Morgan's tokenized deposit works well for internal client purposes on JP Morgan's own network. But it's not the right solution if you want a digital dollar on your iPhone, usable anywhere — because it carries the bank's balance-sheet risk.

"The Arc token represents both governance and utility on the network"

USDC is the gas token on Arc, and Circle holds roughly 25% of the Arc token supply. Doesn't that contradict your chain-agnostic positioning?

At Circle, our bottom line has always been what I call open, continuously evolving financial market infrastructure. USDC is natively present on more than 30 blockchains. We've built some of the most widely used open, neutral infrastructure in the market — the Cross-Chain Transfer Protocol, for instance.

Arc follows the same logic: it's neutral infrastructure. We don't pick winners. But Arc addresses specific needs. Quantum resistance, first and foremost — the industry needs to get ahead of the risk that quantum computing could one day threaten existing blockchains. Then there's privacy. And institutional adoption: for many traditional institutions, using today's public blockchains is still a bridge too far.

Arc is also token-agnostic. USDC and other forms of Circle tokenized money will be available at launch, but not exclusively. Arc is designed to accommodate other tokenized currencies and other projects. That's why we describe it as an economic operating system for the internet. We see Arc as reaching well beyond payments. Two things are true at once: we're an omni-chain company, and we're building a chain for use cases the market doesn't serve yet.

What will the Arc token be used for?

I'll point you to the light paper published yesterday. In short, the Arc token represents both governance and utility on the network.

Three years from now, rates are lower, the CLARITY Act is in force, Arc is live, AI agents are transacting at scale. What does Circle look like? And is there a scenario where that convergence doesn't play out?

I'm limited in what I can say about the future — I never claim to predict it. But here's what I can say. The Bank of England talks about a "multi-currency system." What will likely happen, as technology, regulation, and institutional and mainstream adoption mature, is that access to sound money will no longer depend on the country you were born in. It will become a legal and regulatory right, driven by the convergence of all these technologies.

Wouldn't it be wonderful to have this conversation without ever saying the words gas token, utility token, blockchain, crypto-asset, digital wallet, stablecoin, or electronic money token? When was the last time anyone talked about the internet by mentioning routers, servers, and the hardware that runs it? We're pushing toward a stage where all of this becomes invisible infrastructure. And the more the technology stays front and center, the more it means there's still work to do.