Cryptoupdated 1h ago2 min read
European Banking Authority Classifies Circle’s USDC As Significant E-Money Token Under MiCA
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European Banking Authority designates Circle's USDC as a significant e-money token under MiCA. From November 12, EBA directly supervises USDC's reserves, liquidity, and recovery plans.
9 outlets told this the same way.
EBA Makes USDC Significant
The European Banking Authority designated Circle's USDC as a significant e-money token under the bloc's Markets in Crypto-Assets framework, making it the first of 45 notified stablecoins in the region to receive the label.
The EBA said the classification means USDC will fall under direct EBA oversight starting Nov. 12, while the Paris-based Autorité de Contrôle Prudentiel et de Résolution will share supervisory duties.
The EBA said the classification means USDC will be the first of 45 notified stablecoins in the region to receive the label, and it said the token is the second-largest stablecoin by market value at roughly $73 billion.
The EBA said it applied a significance test based on criteria set out in Article 43 of the regulation, and it said a token qualifies when it meets at least three of those thresholds.
The EBA also signed a memorandum of understanding with the New York State Department of Financial Services to establish a framework for information sharing on cross-border stablecoin activity.
Split Oversight, New Quotes
The EBA said it and France's ACPR would operate a dual supervision structure for significant e-money tokens, with the EBA directly overseeing USDC's own funds, reserve assets, liquidity requirements, and recovery and redemption plans. The EBA said the French authority retains responsibility for governance, qualifying holdings, fit-and-proper assessments, outsourcing, and conflicts of interest. Stable Mint CEO James Bennett told 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 said it reassesses the classification annually, and the EBA said there are currently 45 EMTs in the European Union notified under MiCA.
Digital Euro and Compliance
The European Central Bank continued 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'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 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."
Circle's USDC is issued in the European Union by Circle Internet Financial Europe SAS, while its U.S. counterpart, Circle Internet Financial LLC, operates under New York supervision. The EBA said the classification is reassessed annually, and the EBA said a token qualifies when it meets at least three of the Article 43 thresholds, including metrics related to customer base, transaction volume, and market capitalization.