The European Banking Authority announced on October 14 that it has classified USDC, the stablecoin issued in the European Union by Circle Internet Financial Europe SAS, as a significant e-money token under the Markets in Crypto-Assets Regulation. The classification is the first of its kind among the 45 e-money tokens currently notified under the framework.

The decision takes effect on November 12. From that date, USDC will operate under the dual supervisory structure established by MiCA for significant e-money tokens. Direct responsibility for the issuer’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans will transfer from France’s Autorité de Contrôle Prudentiel et de Résolution to the European Banking Authority.

Division of Supervisory Responsibilities

France’s banking and insurance supervisor will retain authority over corporate governance, qualifying holdings, fitness and propriety assessments of senior management, outsourcing arrangements, and conflicts of interest. The two authorities stated they will cooperate closely to ensure a smooth transition and continued effective oversight.

USDC is issued in the European Union by Circle Internet Financial Europe SAS and in the United States by Circle Internet Financial, LLC. The European Banking Authority also confirmed that it has signed a memorandum of understanding with the New York State Department of Financial Services. The agreement is intended to facilitate cooperation and the exchange of information on cross-border stablecoin activities.

Criteria for Significant Status

Under MiCA, the European Banking Authority is responsible for determining whether an e-money token meets the threshold for significant status. Classification occurs when a token satisfies at least three of the quantitative and qualitative criteria set out in the regulation, which cover factors such as the number of holders, the value of the token in circulation, and the scale of transaction activity. The authority reassesses classifications annually.

The October 14 announcement did not specify which individual criteria USDC met. The designation imposes additional supervisory requirements rather than altering the token’s dollar peg or its core function as a stablecoin. Circle has issued USDC in the European Union under an electronic money institution licence granted by the French supervisor since 2024.

Broader Regulatory Context

USDC ranks as the world’s second-largest stablecoin by market capitalisation. The classification places its European reserves and liquidity safeguards under direct European-level scrutiny while national authorities retain complementary responsibilities. The European Banking Authority exercises its powers in coordination with other competent authorities and any supervisory colleges established under the regulation.

The decision applies the existing MiCA framework to USDC and does not introduce changes to the underlying rules governing reserve composition or other operational requirements for e-money tokens.