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), bringing the dollar-backed cryptocurrency under direct European Banking Authority supervision beginning November 12, 2026. According to the European Banking Authority's announcement, USDC is the first among 45 e-money tokens currently notified under the EU framework to receive this designation. The classification follows an assessment carried out under Article 56 of MiCA, which requires the EBA to classify an e-money token as significant when it meets at least three of the criteria established under Article 43, covering measures including the number of holders, transaction activity, token value and other indicators of usage. The EBA did not specify which specific criteria USDC met, though the decision applies only to USDC and not Circle's euro token EURC. The EBA announced that the classification is reassessed annually, ensuring ongoing compliance monitoring.
The new classification establishes a division of oversight between the European Banking Authority (EBA) and France's Autorité de Contrôle Prudentiel et de Résolution (ACPR). As reported by the EBA, the EBA will oversee reserve assets, liquidity, capital requirements, recovery procedures, and token redemption plans, while France's ACPR retains responsibility for governance, qualifying holdings, fit-and-proper assessments, outsourcing and conflicts of interest. From November 12, the EBA will directly supervise USDC's own funds, reserve of assets, liquidity and recovery and redemption plans, moving these tasks from France's Prudential Control and Resolution Authority (ACPR), which licensed Circle as an e-money institution in July 2024. The EBA explained that Article 117 of MiCA establishes this division for significant e-money tokens, with the EBA handling specified financial safeguards while national authorities retain responsibilities over other regulated activities. The two regulators will cooperate during the transfer of responsibilities to maintain continuity in supervision, with the EBA and ACPR working closely to ensure a smooth transition.
USDC ranks as the world's second-largest stablecoin by market capitalization and is pegged to the U.S. dollar. According to the EBA's announcement, Circle issues the token through separate companies in Europe and the United States, with Circle Internet Financial Europe SAS serving as the issuer in the European Union and Circle Internet Financial, LLC performing that role in the United States. The decision hands an EU-level supervisor control over the reserves behind a token that Circle said had $73.3 billion in circulation worldwide at the end of June, up 19% from a year earlier. From November 12, exchanges and brokers that offer USDC in the EU will list a token whose reserves are supervised by the EBA, rather than by a national authority. USDC's circulation stood at $77.0 billion at the end of March before falling to $73.3 billion by the end of June, according to Circle's quarterly results. The largest dollar stablecoin is absent from regulated EU venues, and Tether did not seek MiCA authorization for USDT, making USDC the largest dollar stablecoin absent from regulated EU venues.
Industry leaders have expressed support for the regulatory approach, with Stable Mint CEO James Bennett telling Cointelegraph that Europe cannot 'wish away' dollar stablecoins, arguing that regulators can control safeguards and rules for issuers. AllUnity CEO Alexander Höptner told Cointelegraph that 'for European corporates to make cross-border payments globally, offering only a euro stablecoin isn't enough'. The EBA's significance designation for USDC came as European policymakers grapple with how to handle dollar-pegged stablecoins, which dominate the market despite the bloc's push for euro-denominated alternatives. The European Securities and Markets Authority has instructed crypto firms to phase out non-MiCA compliant stablecoins within three months, while the Financial Stability Board described cross-border stablecoin oversight as still 'immature'. The European Central Bank continues to explore the possibility of introducing a digital euro, first proposed by EU authorities in 2020, with a possible issuance targeted for 2029.
The EBA confirmed an agreement with the New York State Department of Financial Services (NYDFS) covering cooperation and information exchanges related to cross-border stablecoin activities. As reported by the EBA, the memorandum of understanding announced on June 2 covers issuers the EBA supervises directly under MiCA and provides for information exchange, mutual assistance in ongoing supervision and coordination in a crisis. The agreement covers the New York regulator's confidentiality rules, which the EBA has assessed as equivalent to those under MiCA, a condition for sharing confidential information. The cooperation agreement comes as international regulators continue examining risks associated with global stablecoin operations, with the Financial Stability Board having published a report on October 12 examining cross-border vulnerabilities and financial stability monitoring for global stablecoins.
