In Brief: The European Banking Authority classified USDC as a significant stablecoin, assuming direct supervision of reserves and liquidity from November 12. European and New York regulators
The European Banking Authority classified USDC as a significant stablecoin, assuming direct supervision of reserves and liquidity from November 12.
European and New York regulators established a cooperation agreement to strengthen information sharing and oversight of Circle’s international stablecoin operations.
USDC holds approximately $73 billion in circulation, supported by Circle’s expanding commercial partnerships with Binance and Chelsea Football Club.
The European Banking Authority (EBA) designated Circle’s USDC as a significant e-money token on October 14 under the European Union’s MiCA regulation. According to the official announcement, the classification makes USDC the first of 45 notified e-money tokens to receive significant status.
The decision introduces direct European supervision of USDC’s financial safeguards, including reserves, liquidity, and redemption arrangements. For stablecoin holders and institutions, these requirements govern how Circle maintains assets backing USDC and manages redemption obligations.
Starting November 12, the EBA will assume responsibility for supervising USDC’s own funds, reserve assets, liquidity requirements, and recovery plans. The transfer also covers redemption arrangements previously supervised by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR).
Under the new arrangement, France’s banking regulator will retain responsibility for governance, qualifying holdings, outsourcing, and conflicts of interest. Its remaining duties also include assessing whether individuals responsible for regulated operations meet applicable suitability requirements.
The classification follows the EBA’s assessment of USDC against significance criteria established under the Markets in Crypto Assets Regulation. MiCA requires European authorities to apply additional supervisory requirements when qualifying tokens meet the relevant significance thresholds.
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Beyond the European supervisory changes, the EBA signed a memorandum of understanding with the New York State Department of Financial Services. The agreement establishes a framework for cooperation and regulatory information exchanges involving stablecoin activities across European and American jurisdictions.
Circle operates through separate legal entities, with Circle Internet Financial Europe SAS issuing USDC within the European Union. Meanwhile, Circle Internet Financial LLC handles USDC issuance in the United States.
This international structure makes cooperation between regulators relevant to overseeing the stablecoin’s operations across different financial markets. The EBA confirmed that both authorities will exchange information to support supervision of cross-border stablecoin activities under their respective responsibilities.
USDC remains the world’s second-largest stablecoin, with approximately $73 billion in circulation, according to previous market data. Tether’s USDT leads the market with approximately $184 billion, while the broader dollar-pegged stablecoin market holds around $294 billion.
Circle has also strengthened USDC’s commercial presence through agreements with cryptocurrency exchanges and organizations outside the digital asset industry. In September, Binance purchased $100 million in Circle shares and entered a five-year agreement to promote USDC across its platform.
Separately, Circle secured a sponsorship agreement with Chelsea Football Club in August, featuring USDC branding during the 2026/27 season. These partnerships provide commercial context for USDC’s market position as European authorities prepare to implement the new supervisory structure.
The EBA and ACPR will coordinate the transition before November 12, when their divided supervisory responsibilities formally take effect.
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