Circle's USDC has become the European Union's first significant e-money token under MiCA, placing its key financial safeguards under direct European Banking Authority (EBA) supervision from November 12, 2026. The regulator announced the decision on October 14 after assessing USDC against the bloc's stablecoin rules.
The designation makes USDC the first of 45 notified e-money tokens to receive significant status. It also establishes shared oversight between the EBA and France's banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR).
The classification follow``s Article 56 of the Markets in Crypto-Assets Regulation (MiCA). Under this framework, an e-money token must meet at least three significance criteria outlined in Article 43. These measures cover token value, transaction activity, holder numbers, and broader usage. However, the EBA's announcement did not specify which individual thresholds USDC met.
USDC tracks the U.S. dollar and ranks as the world's second-largest stablecoin by market capitalization. Circle operates separate issuing entities in Europe and the United States. Circle Internet Financial Europe SAS issues the token within the EU, while Circle Internet Financial, LLC handles U.S. issuance.
The designation follows Circle's earlier entry into Europe's regulated stablecoin market. In July 2024, the company obtained an electronic money institution license from France's ACPR. That authorization allowed Circle to issue USDC and its euro-backed EURC token under MiCA. Therefore, the latest decision changes supervisory arrangements rather than introducing a new European market authorization.
Starting November 12, the EBA will oversee Circle's compliance with capital, reserve asset, and liquidity requirements. Its responsibilities will also cover recovery and redemption plans. These safeguards address the issuer's financial resources, its ability to meet obligations, and procedures for handling financial difficulties.
Meanwhile, France's ACPR will retain authority over corporate governance, qualifying ownership interests, senior management assessments, outsourcing, and conflicts of interest. Article 117 of MiCA establishes this division of responsibilities. Both regulators will coordinate their work to maintain supervisory continuity.
The classification also follows Circle's recent calls to revise Europe's reserve requirements. Earlier in October, the company questioned mandatory commercial bank deposit thresholds for stablecoin issuers. Circle argued that these requirements could expose issuers to risks involving their banking partners. It cited the 2023 collapse of Silicon Valley Bank, which temporarily restricted access to approximately USD 3.3 billion in USDC reserves.
The company proposed liquidity-based reserve requirements instead of fixed deposit thresholds. Nevertheless, the EBA's latest decision leaves existing MiCA rules unchanged.
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Alongside the classification, the EBA announced a memorandum of understanding with the New York State Department of Financial Services (NYDFS). The agreement establishes cooperation and information-sharing arrangements for cross-border stablecoin activities. It addresses oversight involving issuers operating across separate regulatory jurisdictions.
Since Circle issues USDC through European and American entities, the agreement provides a framework for supervisory information exchanges without replacing either authority's legal responsibilities.
Separately, the Financial Stability Board examined cross-border stablecoin risks in an October 12 report. It identified challenges arising when stablecoin operations span multiple jurisdictions and financial sectors.
Under Article 119, MiCA also requires the EBA to establish supervisory colleges for significant tokens. These groups bring relevant authorities together to exchange information and provide supervisory opinions.
The EBA must also review whether tokens continue meeting significance criteria, using MiCA requirements and indicators established under Commission Delegated Regulation (EU) 2024/1506. From November 12, the EBA will oversee USDC's specified financial safeguards, while the ACPR will continue supervising Circle's governance and other national regulatory obligations.
Circle's USDC classification introduces direct EBA supervision over reserves, liquidity, capital requirements, and recovery arrangements beginning November 12. France's ACPR will retain oversight of other corporate matters. Meanwhile, cooperation with New York regulators will support cross-border information sharing as European authorities apply MiCA's existing supervisory framework.