Circle's USDC Becomes First EU 'Significant' Stablecoin

Circle’s USDC has become the first stablecoin to receive the European Union’s "significant" e-money token classification under the Markets in Crypto-Assets Regulation (MiCA), according to CryptoNews. The designation brings the dollar-backed cryptocurrency under direct European Banking Authority (EBA) supervision beginning November 12.

The EBA announced the decision on October 14 after assessing USDC against criteria established by MiCA. Of the 45 e-money tokens currently notified under the framework, USDC is the first to receive the designation. The classification divides regulatory oversight between the EBA and France’s banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR).

Divided Regulatory Oversight

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 own-funds requirements, reserve assets, liquidity rules, and recovery and redemption plans for the token.

Meanwhile, France’s ACPR will continue supervising other operational parts of Circle’s European business. Its remaining responsibilities include corporate governance, qualifying ownership interests, senior management assessments, outsourcing arrangements, and potential conflicts of interest. The EBA and ACPR will cooperate during the transfer of responsibilities to maintain supervisory continuity.

Compliance and Cross-Border Agreements

Circle has previously been issuing the stablecoin through its French entity under MiCA since obtaining an electronic money institution license from the ACPR in July 2024. USDC is pegged to the U.S. dollar and ranks as the world’s second-largest stablecoin by market capitalization, issued by Circle Internet Financial Europe SAS in Europe and Circle Internet Financial, LLC in the United States.

Alongside the new classification, the EBA confirmed an agreement with the New York State Department of Financial Services (NYDFS) by signing a memorandum of understanding covering cross-border stablecoin supervision and information sharing.

Key facts

• Circle's USDC is the EU's first significant e-money token out of 45 notified under MiCA.
• Direct EBA and French ACPR joint supervision begins on November 12.
• The EBA will oversee reserve assets, liquidity, capital requirements, and redemption plans.
• France's ACPR retains responsibility for governance, management suitability, and conflicts of interest.