Circle’s USDC has become the first stablecoin to receive the European Union’s “significant” e-money token classification under MiCA, bringing the dollar-backed cryptocurrency under direct European Banking Authority supervision beginning November 12, 2026.
Summary
- Circle’s USDC became the first significant e-money token among 45 notified under European Union regulations.
- November 12 begins joint supervision by the European Banking Authority and France’s financial regulator, ACPR.
- The EBA will oversee reserve assets, liquidity, capital requirements, recovery procedures, and token redemption plans.
- France’s ACPR retains responsibility for governance, outsourcing, ownership assessments, management suitability, and potential conflicts of interest.
- The EBA signed an information sharing agreement with New York regulators covering cross border stablecoin supervision.
The European Banking Authority (EBA) announced the decision on October 14 after assessing USDC against the criteria established by the Markets in Crypto-Assets Regulation (MiCA). Of the 45 e-money tokens currently notified under the framework, USDC is the first to receive the designation. The new classification will divide oversight between the EBA and France’s banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR).
Circle’s USDC becomes the first major token under MiCA oversight
The EBA’s decision places USDC under the supervisory framework established for significant e-money tokens. MiCA uses the term to identify certain digital assets linked to a single official currency that meet regulatory criteria concerning their size, use and financial activity.
USDC is pegged to the U.S. dollar and ranks as the world’s second-largest stablecoin by market capitalization. Circle issues the token through separate companies in Europe and the United States.
In the European Union, Circle Internet Financial Europe SAS serves as the issuer. Circle Internet Financial, LLC performs that role in the United States, according to the EBA’s announcement.
The designation follows an assessment carried out under Article 56 of MiCA. The regulation requires the EBA to classify an e-money token as significant when it meets at least three of the criteria established under Article 43.
The criteria cover measures including the number of holders, transaction activity, token value and other indicators of how extensively an asset is used. However, the October 14 announcement did not identify which individual criteria USDC satisfied.
The EBA’s decision does not introduce USDC to the European market for the first time. Circle has been issuing the stablecoin through its French entity under MiCA since 2024.
Previously, the company announced that it had obtained an electronic money institution license from the ACPR in July 2024. The authorization allowed Circle to issue USDC and its euro-backed stablecoin EURC in accordance with the European framework.
Circle’s earlier European stablecoin license under MiCA established France as the company’s regulatory base for EU issuance.
The latest classification concerns the additional supervisory requirements applicable to USDC as a significant token.
EBA takes responsibility for USDC reserves in November
Beginning November 12, the EBA will take direct responsibility for supervising several financial safeguards associated with USDC.
The regulator will oversee Circle’s compliance with applicable own-funds requirements, reserve assets, liquidity rules, and recovery and redemption plans for the token.
Own funds refer to financial resources the issuer must maintain to meet applicable regulatory obligations. Reserve assets concern the assets held to support the stablecoin’s value and meet redemption requests.
Liquidity requirements address the availability of assets that can be used to meet financial obligations when required. Recovery plans establish procedures for responding to financial difficulties, while redemption plans address how tokenholders can recover their funds under the applicable rules.
France’s ACPR will continue supervising other parts of Circle’s European business.
Its remaining responsibilities include corporate governance, qualifying ownership interests, assessments of senior management, outsourcing arrangements and conflicts of interest.
The EBA explained that the two regulators would cooperate during the transfer of responsibilities to maintain continuity in supervision.
Article 117 of MiCA establishes this division for significant e-money tokens. The EBA handles specified financial safeguards, while national authorities retain responsibilities over other regulated activities.
The European Securities and Markets Authority’s official rulebook specifies the powers transferred to the EBA when an e-money token receives significant status.
The classification does not remove the ACPR from Circle’s supervision or transfer every regulatory responsibility to the European authority.
The EBA will work with the French regulator on the areas where their responsibilities intersect.
Circle has questioned parts of Europe’s stablecoin rules
The classification follows recent requests from Circle for changes to parts of MiCA’s stablecoin requirements.
In early October, the company urged EU policymakers to reconsider rules governing the reserve assets that stablecoin issuers must hold.
Circle argued that mandatory commercial bank deposit requirements could expose issuers to financial risks arising from their banking partners.
Current MiCA requirements provide for a minimum share of reserve assets to be held as deposits with credit institutions. For certain significant issuers, the applicable proportion increases.
The company’s recent proposal to revise MiCA’s bank deposit rules called for replacing fixed deposit thresholds with requirements tied more closely to reserve liquidity.
Circle cited its experience during the 2023 collapse of Silicon Valley Bank, when approximately $3.3 billion of USDC reserves became temporarily inaccessible.
Its policy recommendations included changes to the treatment of cross-border stablecoin issuance and recognition of regulated issuers operating outside Europe.
Another report on Circle’s proposed MiCA changes detailed the company’s argument that only three of the world’s 30 largest stablecoins complied with the European framework at the beginning of October.
Circle identified USDC, EURC and USDG among the compliant tokens in that assessment.
The EBA’s October 14 classification does not announce changes to the existing MiCA requirements. It applies the current legal framework to USDC and establishes the supervisory arrangements scheduled to begin in November.
EU and U.S. regulators agree to cooperate on stablecoins
Alongside the new classification, the EBA confirmed an agreement with the New York State Department of Financial Services (NYDFS).
The two authorities signed a memorandum of understanding covering cooperation and information exchanges related to cross-border stablecoin activities.
According to the EBA, the arrangement will support its supervision of stablecoins issued through entities operating in different jurisdictions.
USDC is issued through Circle’s European subsidiary and its U.S. entity, placing the token within separate regulatory systems.
The EBA said the agreement would allow the European and New York authorities to exchange information as part of their supervisory cooperation.
The memorandum does not replace the respective legal responsibilities of either authority, and the October 14 announcement did not disclose further operational arrangements.
The cooperation agreement comes as international regulators continue examining the risks associated with global stablecoin operations.
On October 12, the Financial Stability Board published a report examining cross-border vulnerabilities and financial stability monitoring for global stablecoins.
The international body identified stablecoin arrangements as activities that can operate across national borders and financial sectors, creating supervisory challenges for regulators.
For significant tokens, MiCA requires the EBA to establish and chair supervisory colleges involving relevant financial authorities. Article 119 provides for these groups to exchange information and issue opinions on specified supervisory matters.
The European regulator is responsible for reviewing whether e-money tokens continue to satisfy the significance criteria. Article 56 establishes the classification process, while the EBA’s published supervisory framework provides for regular assessments.
Commission Delegated Regulation (EU) 2024/1506 supplies indicators used in the significance assessment, alongside the criteria already established in MiCA.
Under the timetable announced on October 14, the EBA will assume its specified responsibilities for USDC’s reserves, liquidity, own funds, and recovery and redemption arrangements on November 12. The ACPR will retain supervision of Circle’s governance, ownership assessments, outsourcing and conflicts of interest.
