EBA Designates Circle’s USDC a Significant EU Token

The European Banking Authority designated Circle’s USDC the European Union’s first e-money token classified as significant under the bloc’s Markets in Crypto-Assets Regulation, expanding direct oversight of the stablecoin’s reserves and financial safeguards. The EBA announced the classification on October 14. From November 12, it is due to supervise USDC’s own funds, reserve assets, liquidity, and recovery and redemption plans. Those responsibilities are transferring from France’s Prudential Control and Resolution Authority, known as the ACPR, which licensed Circle as an electronic money institution in July 2024. The change adds a layer of supervision to the existing regulatory framework. The ACPR will retain oversight of governance, qualifying holdings, assessments of senior officials, outsourcing and conflicts of interest. The EBA and ACPR are expected to coordinate during the transition. The designation applies to USDC, which is pegged to the U.S. dollar, and not Circle’s euro-linked token EURC. Under MiCA, an e-money token may be classified as significant if it meets at least three of seven criteria. The EBA did not specify which criteria USDC met.