Circle’s USDC Leads as First Stablecoin Subject to Fall Under New EU Rules

The USD-denominated Circle's USDC is the first stablecoin classified by the EU as a “significant” e-money token according to MiCA legislation. Therefore, it will fall under EBA oversight starting from November 12, 2026. This was announced by the EBA on October 14 following the evaluation of USDC relative to the criteria provided for in the Markets in Crypto-Assets Regulation (MiCA). Out of the 45 e-money tokens that have been notified, USDC is the first to have received such a label. Under this classification, the supervision of USDC shall be shared by both the EBA and France's banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR). 

EBA to Monitor USDC Reserves and Redemption Protections Under MiCA

The decision by the EBA means that USDC falls within the supervisory regime that applies to important e-money tokens. The MiCA regulation refers to the term to refer to specific digital assets that are connected to a single official currency.

USDC is linked to the US dollar and is the second biggest stablecoin in terms of market capitalisation in the world. The token is issued by Circle through different companies in the US and Europe. Circle Internet Financial Europe SAS acts as the issuer of the token in the European Union, while Circle Internet Financial, LLC is the issuer in the US.

This designation is based on the assessment conducted in accordance with Article 56 of MiCA. According to the regulation, the EBA must consider an e-money token significant if it satisfies at least three of the criteria set out in Article 43. These criteria include the number of holders, transactions, token value, and other signs of the extent to which the asset is utilised. Nevertheless, the October 14 statement did not state which specific criteria USDC met.

As of November 12, the EBA will assume direct supervision of various financial protections related to USDC. It will be responsible for monitoring Circle's compliance with its own-funds requirements, reserve assets, liquidity rules, and the recovery and redemption plan for the token. Own funds consist of financial resources that are required by the issuer to satisfy regulatory requirements. Reserve assets relate to the assets maintained to back the value of the stablecoin and satisfy redemption requests.

In March, Circle urged UK lawmakers to develop a crypto regulatory framework by combining elements from the MiCA regulation and the US's stablecoin rules. Speaking before a House of Lords committee, Circle's policy chief Dante Disparte said the UK has a unique opportunity to create a distinct system that balances regulatory clarity with innovation. The UK is starting to regulate cryptocurrency, and the proposal comes at a time when competition around the world is getting more intense.