The European Banking Authority (EBA) has formally classified Circle's USDC as the European Union's first significant e-money token under the Markets in Crypto-Assets regulation, a move that shifts key supervision of the $74 billion stablecoin from France's ACPR to the EBA and imposes stricter prudential requirements on Circle. The designation takes effect on November 12.
From that date, the EBA will directly oversee USDC in areas including own funds, reserve assets, liquidity requirements, and recovery and redemption plans. France's Autorité de Contrôle Prudentiel et de Résolution will retain responsibility for governance, outsourcing, qualifying holdings, conflicts of interest, and fit-and-proper assessments. USDC is the first of 45 e-money tokens currently notified under MiCA to be classified as significant. Circle obtained its French electronic money institution licence in 2024, making USDC and EURC among the first major stablecoins authorized under the EU framework.
MiCA reserves enhanced supervision for tokens whose scale, transaction activity, international use, and links to the financial system make them more important to financial stability. The EBA reviews significance conditions annually. Significant e-money tokens face additional liquidity, capital, stress-testing, and reserve-management requirements designed to ensure issuers can meet redemptions during market stress.
A particularly important change is the liquidity framework. Under MiCA, significant e-money token issuers can be required to hold at least 60% of reserves associated with an official currency in deposits at credit institutions, compared with a 30% minimum under the standard framework. This comes weeks after Circle asked the European Commission to reconsider the 30%-60% bank-deposit rules, arguing that mandatory commercial-bank exposure can increase credit and counterparty risk rather than make stablecoin reserves safer. Circle's USDC reserves totaled approximately $74.3 billion against $74.1 billion in circulation as of October 5.
The issue also divides major stablecoin issuers. Tether CEO Paolo Ardoino has said the company declined to seek MiCA authorization for USDT partly because of the bank-deposit requirement. The EBA itself has recently called for aspects of MiCA's reserve rules to be reviewed while maintaining effective risk controls, meaning Circle's new classification arrives while policymakers are reconsidering parts of the framework it must now follow.
Cross-border oversight is another key element. USDC is issued in the EU by Circle Internet Financial Europe SAS and in the United States by Circle Internet Financial LLC. To address this structure, the EBA has signed a memorandum of understanding with the New York State Department of Financial Services covering regulatory cooperation and information sharing. European regulators are increasingly focused on whether multi-issuer stablecoin structures can ensure sufficient reserves and redemption capacity remain available inside the EU during stress.
The significant designation is not a regulatory endorsement of USDC over competitors, but it does create a commercial distinction. Circle is now positioned inside the EU regulatory perimeter, while Tether's USDT remains outside the MiCA authorization system. That matters for European exchanges and financial institutions deciding which stablecoins they can offer. USDT remains larger globally, but MiCA has created a European market where regulatory eligibility can matter alongside market capitalization and liquidity.
