The European Banking Authority (EBA) will start directly supervising @circle’s $USDC stablecoin in the European Union on Thursday, November 12. This makes $USDC the first token subject to EU-level oversight reserved under the Markets in Crypto-Assets Regulation (MiCA) for the largest stablecoins.
What Changes for $USDC Supervision
According to the EBA’s official statement, as reported by The Block, the authority will assume direct responsibility for $USDC’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans. France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR) currently oversees these areas.
The ACPR will retain some responsibilities. The same report says the French regulator will continue to handle governance, qualifying holdings, fit and proper assessments, and conflicts of interest. This division follows MiCA Article 117, under which issuers of significant e-money tokens are subject to dual supervision by the EBA and the relevant national competent authority, according to the EBA.
Why $USDC Was Classified as Significant
The change follows the EBA’s October 14 decision to classify $USDC as a significant e-money token. The EBA said that 45 e-money tokens have been notified under MiCA in the EU, and that $USDC is the first to receive significant status.
The classification covers $USDC issued in the EU by Circle Internet Financial Europe SAS. In the United States, the token is issued by Circle Internet Financial, LLC. The EBA says it has also signed a memorandum of understanding with the New York State Department of Financial Services to support oversight of cross-border stablecoin activity.
The designation does not indicate that there is a problem with the token. Crypto.news reported that significant status does not mean the regulator has found $USDC unsafe. Coin Edition added that MiCA already requires e-money token issuers to redeem tokens at par on request, and that the additional supervision does not make $USDC a bank deposit.
Forexcrunch reports that this is the first time the significance framework has been applied to an e-money token, and that annual reassessments keep the status of $USDC and the other 44 notified tokens under review. This would make the designation a yearly checkpoint rather than a permanent one.
For Circle, the practical effect is that a second regulator will examine the financial safeguards behind $USDC. Across the wider market, the 44 other notified tokens remain under assessment against the same criteria.
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