- USDC becomes the EU’s first significant e-money token among 45 notified under MiCA.
- The EBA assumes direct oversight of USDC reserves and capital rules on November 12.
- USDC holders retain $1 redemption rights but lack EU bank deposit protections.
The European Banking Authority (EBA) has classified Circle’s USDC as the European Union’s first major e-money token under the Markets in Crypto-Assets (MiCA) regulation, introducing a new supervisory framework effective November 12, 2026.
The October 14 decision shifts responsibility for USDC’s financial safeguards to the EBA while preserving existing redemption rights for holders. Among 45 e-money tokens notified under MiCA, USDC is the first to receive the significant designation.
Circle Faces Direct EBA Oversight and Stricter Reserve Rules
For Circle Internet Financial Europe SAS, the principal change concerns regulatory supervision. France’s Prudential Supervision and Resolution Authority (ACPR) currently oversees the issuer’s financial obligations.
However, from November 12, the EBA will assume direct responsibility for capital requirements, reserve assets, liquidity management, and recovery and redemption plans. Nevertheless, the transfer will not remove France’s regulator from Circle’s oversight. The ACPR will continue supervising corporate governance, qualifying holdings, management suitability, outsourcing, and conflicts of interest.
Both authorities will coordinate under MiCA’s dual-supervision framework. Meanwhile, the classification introduces stricter financial requirements. MiCA increases the minimum proportion of funds held in commercial bank deposits from 30% to 60% for significant e-money tokens.
Circle has opposed this requirement, arguing that greater reliance on bank deposits increases exposure to counterparty risks. Beyond Europe, the EBA has signed a memorandum of understanding with the New York State Department of Financial Services to coordinate supervision and exchange information.
What Stays the Same for USDC Holders Under MiCA?
For USDC holders, the new classification does not change existing redemption rights. MiCA already requires e-money token issuers to redeem tokens at par upon request, preserving the legal right to receive $1 for each USDC.
However, additional regulatory supervision does not make USDC a bank deposit. Consequently, holders remain outside European deposit-guarantee schemes despite the enhanced oversight.
The classification also does not introduce new restrictions on USDC access through compliant European crypto-asset service providers.
Circle also retains centralized control over the token, including the ability to freeze specific blockchain addresses for regulatory compliance or law enforcement purposes. The EBA will reassess USDC’s significant-token classification annually, while Circle’s centralized controls, including its ability to freeze blockchain addresses, remain in place.
Related: Circle Brings USDC, EURC to Nu’s 140M-Customer Global Payments Push
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