The European Banking Authority (EBA) has designated Circle’s USDC as the European Union’s first significant e-money token under the Markets in Crypto-Assets Regulation (MiCA), placing one of
The European Banking Authority (EBA) has designated Circle’s USDC as the European Union’s first significant e-money token under the Markets in Crypto-Assets Regulation (MiCA), placing one of the world’s largest dollar-backed stablecoins under direct EU-level supervision.
The October 14 classification will take effect on November 12, 2026, transferring responsibility for USDC’s capital requirements, reserves, liquidity management and recovery arrangements to the EBA.
France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), which currently supervises Circle’s European issuing entity, will retain authority over governance, management suitability, outsourcing and conflicts of interest.
USDC becomes the first of 45 e-money tokens notified under MiCA to receive the significant designation.
Circle issues USDC in the European Union through Circle Internet Financial Europe SAS, its French-regulated electronic money institution. The token is separately issued in the United States by Circle Internet Financial LLC.
The new classification establishes a dual-supervision structure, dividing responsibilities between European and French regulators.
The EBA will oversee the financial safeguards supporting USDC, including the assets backing tokens in circulation, issuer capital, liquidity requirements and redemption arrangements.
The ACPR will continue supervising Circle’s corporate governance and operational controls.
To coordinate oversight of USDC’s international operations, the EBA has signed a memorandum of understanding with the New York State Department of Financial Services, allowing regulators to exchange supervisory information.
Circle already operates MiCA-compliant USDC and EURC in Europe. The significant designation adds supervisory requirements rather than granting the stablecoin its first authorization.
The decision also distinguishes Circle’s regulatory position from competitors such as Tether, whose CEO rejected MiCA’s reserve requirements over concerns about concentrating stablecoin backing assets within European banks.
The supervisory decision arrives as French lawmakers consider changing the tax treatment of cryptocurrency conversions into stablecoins.
An amendment to France’s 2027 budget, adopted by the National Assembly’s Finance Committee on October 7, proposes treating exchanges into MiCA-defined e-money tokens as taxable disposals.
Under the proposal, converting Bitcoin or another cryptocurrency into a qualifying stablecoin could trigger capital gains taxation without requiring conversion into traditional fiat currency.
The standard flat rate is currently 31.4% on taxable gains, rather than the entire transaction value.
The proposed changes would apply from January 1, 2027, if enacted. They have not yet become law and remain subject to further parliamentary approval.
European financial institutions are also developing alternatives to dollar-denominated stablecoins.
The Qivalis euro stablecoin project has expanded to 37 participating financial institutions across 15 countries, including ING, BNP Paribas, UniCredit, BBVA and ABN AMRO.
Qivalis intends to issue a euro-denominated token backed 1:1 by reserves, targeting institutional payments, blockchain settlement and tokenized financial markets.
The consortium’s May expansion added 25 banks, extending its planned distribution network across Europe.
Qivalis remains in the authorization process with the Dutch Central Bank and has targeted the second half of 2026 for its launch, subject to regulatory approval.
For Circle, the next confirmed regulatory milestone is November 12, when the EBA assumes its designated supervisory responsibilities for USDC.
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