EBA Designates Circle’s USDC as European Union’s First Significant E-Money Token
The European Banking Authority assumes direct oversight of USDC as the EU designates its first significant e-money token under MiCA.
EBA Designates Circle's USDC as European Union's First Significant E-Money Token
The European Banking Authority assumes direct oversight of USDC as the EU designates its first significant e-money token under MiCA.
EBA Prepares to Assume Direct Oversight of Circle's Stablecoin
The European Banking Authority (EBA) has officially classified Circle's USDC as the European Union's first significant e-money token under the region's Markets in Crypto-Assets (MiCA) regulatory framework, according to reporting by CoinDesk and CryptoSlate.
Out of 45 e-money tokens formally notified under MiCA, USDC issued by Circle Internet Financial Europe SAS is the first asset to receive the designation.
The classification establishes a supervisory handover set for Nov. 12, when key oversight responsibilities shift from France's financial regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), to the European Banking Authority.
Division of Powers Between the EBA and French Authorities
Beginning Nov. 12, the EBA will assume direct direct supervision over the EU issuer's own funds, regulatory capital, and reserve assets. The European agency will also monitor liquidity mandates alongside redemption and recovery plans.
France's ACPR will retain authority over operational governance, including fit-and-proper assessments, qualifying holdings, outsourcing oversight, and potential conflicts of interest.
The EBA confirmed both regulatory agencies will work together to ensure a smooth transition during the supervisory handover.
Reserve Requirements and Circle's Policy Proposals
Under Article 54 of MiCA, baseline regulations require token issuers to hold a minimum of 30% of funds received in bank deposits, while significant e-money token issuers face deposit requirements reaching 60%. The remaining reserves must be kept in secure, low-risk, highly liquid instruments denominated in the token's reference currency.
Circle addressed these requirements in an Oct. 1 consultation response to the European Commission, arguing that mandatory bank deposit minimums heighten exposure to banking-sector credit and counterparty risks.
The company proposed replacing fixed deposit floors with flexible asset-liquidity frameworks and called for the removal of rules capping sovereign exposure at 35% and single-bank exposure at 1.5% of a financial institution's total assets.
Dual Issuance Structures for Global Operations
According to the EBA and Circle's white paper, USDC operates under two separate corporate entities: Circle Internet Financial Europe SAS for European Economic Area (EEA) residents and Circle Internet Financial, LLC for non-EEA users.
While tokens issued by both entities remain fully fungible, global circulation metrics do not represent the reserve backing held by the European issuer.
In its consultation filing, Circle urged European regulators to maintain multi-issuance models and establish formal safeguards, including dynamic rebalancing between global and EU-specific reserves.
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