TLDR
- Washington-based policy group advocates for perpetual futures to fall under MiFID II derivatives framework.
- Classification should depend on product economics rather than underlying blockchain technology, HPC states.
- Perpetual futures warrant different treatment compared to standard retail CFD products.
- Circle submitted proposals targeting reserve requirements and bank deposit rules for stablecoins.
- Multiple industry players including Deutsche Börse contributed feedback to European Commission review.
The Hyperliquid Policy Center submitted a formal request to the European Commission calling for perpetual futures in cryptocurrency markets to receive classification as derivatives under MiFID II regulations rather than MiCA. The organization filed its official response on September 30 during the Commission’s comprehensive evaluation of European crypto regulations.
Based in Washington, the organization contends that regulatory frameworks should categorize financial products according to their fundamental economic characteristics rather than the blockchain technology used for settlement. The group maintains that current European derivatives legislation offers sufficient coverage for perpetual futures contracts without establishing additional specialized rules.
Policy Center Advocates for Existing Derivatives Framework
The Hyperliquid Policy Center maintains that MiFID II presently includes derivative classifications suitable for perpetual futures products. The organization seeks regulatory guidance clarifying the application of existing rules to blockchain-based markets while confirming that settlement via distributed ledger technology does not alter fundamental product classification.
HPC further challenges the notion of equating perpetual futures with contracts for difference. The organization emphasizes that trading platforms operating order book systems do not serve as direct counterparties in every transaction. Instead, the group advocates for mandatory disclosure requirements covering funding mechanisms, margin maintenance policies, and liquidation procedures before customer participation.
Stablecoin Issuer Requests Reserve Flexibility
Circle leveraged the regulatory review period to contest MiCA provisions mandating e-money token issuers maintain a minimum 30% of reserves in commercial banking deposits. This threshold escalates to 60% when authorities designate a token as significant. Circle proposes implementing more adaptable liquidity standards.
The payment technology firm seeks modifications to restrictions governing sovereign debt holdings and banking institution exposure. European central banking authorities echoed similar concerns in their submission, advocating for elimination of MiCA’s fixed bank-deposit requirements in favor of liquidity standards based on asset maturity profiles, contributing additional perspective to the stablecoin reserve debate.
Regulatory Review Attracts Broad Industry Participation
HPC referenced Hyperliquid’s HIP-3 market infrastructure as demonstrating how regulated entities could leverage public blockchain systems while maintaining control over leverage limits and market access. HIP-3 markets temporarily accounted for 75% of Hyperliquid perpetual contract volume during late July before declining to approximately one-quarter of total volume in recent periods.
Additional organizations contributed regulatory proposals. Deutsche Börse requested establishment of a distinct category for settlement e-money tokens, whereas Chamber of Progress endorsed allowing rewards on such instruments and preserving multi-issuance capabilities. These submissions expand the scope of the broader EU crypto regulation review encompassing trading instruments and stablecoin frameworks.
The European Commission faces the task of evaluating conflicting recommendations from cryptocurrency companies, banking institutions, market infrastructure operators, and central banking authorities. The review outcome may determine how European regulators apply MiCA and MiFID II frameworks to blockchain-based financial instruments while preserving their essential economic characteristics across regulated digital asset marketplaces throughout the European Union.
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