The European Banking Authority (EBA) has officially classified Circle’s USDC as a significant e-money token under the Markets in Crypto-Assets Regulation (MiCA), a landmark decision announced on October 14, 2026. This makes USDC the first of 45 notified e-money tokens to receive this designation, underscoring its prominence in the stablecoin market.
As the second-largest stablecoin, USDC boasts a market capitalization of approximately $73 billion, trailing only Tether’s USDT, which holds the top spot at $184 billion.
Beginning November 12, 2026, the EBA will assume direct oversight responsibilities for several key financial safeguards associated with USDC. These include requirements concerning own funds, reserve assets, liquidity management, and plans for recovery and redemption.
In this context, own funds refer to the financial resources that an issuer must maintain to fulfill its obligations, while reserve assets are the holdings that underpin the token’s value and facilitate redemption requests. Concurrently, France’s financial regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), will retain other responsibilities, including governance, ownership interests, and managing potential conflicts of interest.
Both regulatory bodies have pledged to collaborate throughout this transitional phase, as delineated in Article 117 of MiCA, which specifies the division of responsibilities for significant tokens.
Criteria for USDC’s Classification
The EBA’s classification of USDC as a significant e-money token is guided by MiCA, which mandates that a token must satisfy at least three specific criteria. These criteria are based on the number of holders, transaction volume, and overall token value, although the EBA has not disclosed which criteria USDC specifically met.
Circle has been active in Europe since 2024, issuing USDC through its French subsidiary, Circle Internet Financial Europe SAS. This entity received an electronic money institution license from the ACPR in July 2024, with the American counterpart, Circle Internet Financial, LLC, managing the issuance in the United States.
Industry Reactions
Industry leaders have weighed in on this significant regulatory development. James Bennett, CEO of Stable Mint, suggested that while Europe cannot ignore the existence of dollar-denominated stablecoins, regulators have the power to set the rules for issuers. In a similar vein, Alexander Höptner, CEO of AllUnity, noted that merely providing a euro stablecoin does not suffice for European companies operating on a global scale.
Circle’s Advocacy for MiCA Revisions
In a proactive move, Circle recently called on EU policymakers to reconsider the reserve asset regulations outlined in MiCA. The company argued that mandating commercial bank deposits for reserve assets could expose issuers to significant risks, referencing the 2023 collapse of Silicon Valley Bank, which temporarily restricted access to about $3.3 billion of USDC reserves.
Furthermore, Circle highlighted that only three of the 30 largest stablecoins were compliant with MiCA regulations as of early October. The EBA’s classification does not alter any existing MiCA requirements; it merely applies the current rules to USDC.
Additionally, the EBA has signed a memorandum of understanding with the New York State Department of Financial Services to enhance cooperation and information sharing regarding cross-border stablecoin activities. This comes on the heels of a report published by the Financial Stability Board that addressed the cross-border risks associated with global stablecoins.
As the EBA prepares to take on its regulatory responsibilities for USDC’s reserves and liquidity, the implications of this designation are likely to reverberate throughout the crypto landscape, setting a precedent for future stablecoin regulation in Europe.
