EBA Assumes Direct Supervisory Responsibilities for USDC Under MiCA

The European Banking Authority (EBA) has assumed direct supervisory responsibilities for key aspects of USDC, the dollar-backed stablecoin issued in the European Union by Circle Internet Financial Europe SAS. The new arrangement took effect on 12 November 2026, following the EBA’s decision to classify USDC as the European Union’s first significant e-money token (EMT) under the Markets in Crypto-Assets Regulation (MiCA).

The classification was announced on 14 October 2026 and marks an important development in the implementation of the EU’s stablecoin regulatory framework. Of the 45 e-money tokens notified under MiCA at the time of the decision, USDC was the first to meet the criteria for significant status.

The designation does not transfer all regulatory supervision of Circle’s European entity to the EBA. Instead, MiCA establishes a dual supervisory arrangement for significant e-money tokens. From 12 November, the EBA has taken responsibility for supervising the issuer’s compliance in specific prudential areas, including own funds, reserve assets, liquidity requirements and recovery and redemption plans. France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), which previously supervised these matters, retains responsibility for other aspects of the issuer’s activities.

These include governance arrangements, qualifying holdings, fit and proper assessments of relevant individuals, outsourcing and conflicts of interest. The two authorities are expected to coordinate their supervisory activities to ensure that the division of responsibilities does not create gaps in oversight.

Under MiCA, an e-money token may be classified as significant when it meets at least three of the criteria established by the regulation. These include the number of holders, the value or market capitalisation of the token, the volume and value of transactions, its use in international payments and remittances, its interconnectedness with the financial system and the nature of the issuer’s wider activities. The EBA has not publicly specified which individual criteria were decisive in its assessment of USDC.

Significant classification brings additional regulatory requirements intended to address the potential risks posed by large-scale stablecoin arrangements. These requirements include enhanced obligations relating to the issuer’s own funds, reserve management, liquidity policies and the availability of appropriate arrangements for the custody of reserve assets.

In particular, issuers of significant e-money tokens must maintain additional own funds calculated under the relevant MiCA provisions. They are also subject to more demanding reserve and liquidity requirements, including independent audits of reserve assets at six-month intervals. The framework further requires appropriate liquidity management policies and regular liquidity stress testing.

The recovery and redemption arrangements are another important element of the enhanced supervisory framework. Issuers must maintain plans designed to ensure that they can respond to financial difficulties and continue to meet their obligations to token holders. These arrangements are particularly relevant to stablecoins, whose credibility depends on the issuer's ability to maintain the value and redeemability of the tokens in accordance with the applicable legal requirements.

The EBA’s new responsibilities also reflect the cross-border nature of USDC’s operations. Circle Internet Financial Europe SAS issues USDC within the European Union, while a separate entity, Circle Internet Financial, LLC, issues the token in the United States. To support cooperation in relation to these activities, the EBA has signed a memorandum of understanding with the New York State Department of Financial Services (NYDFS). The agreement provides a framework for cooperation and information exchange between the authorities.

The arrangement is intended to support more effective supervision where stablecoin issuance and related activities extend across different regulatory jurisdictions. It also reflects the importance of international cooperation in monitoring digital-asset businesses whose operations, customers and financial flows are not confined to a single market.

For cryptocurrency exchanges and other crypto-asset service providers operating in the EU, USDC’s significant classification does not change the token’s status as an e-money token or automatically impose new authorisation requirements on platforms that support it. The principal regulatory change concerns the supervision of the issuer and the additional obligations applicable to significant EMTs.

Nevertheless, the development is relevant to service providers that list, hold or facilitate transactions in USDC. The enhanced oversight of reserve assets, liquidity and redemption arrangements provides an additional supervisory layer around the issuer's ability to meet its obligations. Businesses using stablecoins for payments, settlements or treasury operations should continue to assess issuer-related risks, redemption arrangements and their own regulatory obligations.

The classification also does not extend automatically to other tokens issued by Circle. Its euro-denominated stablecoin, EURC, and the other 44 e-money tokens notified under MiCA were not included in the EBA’s significant classification decision. These tokens therefore remain subject to supervision by their respective national competent authorities unless they are separately classified as significant or otherwise become subject to additional requirements under the regulation.

The designation is also not permanent. The EBA is required to reassess the significance of relevant tokens annually to determine whether they continue to satisfy the applicable criteria. Other e-money tokens may therefore come within the enhanced supervisory framework in the future if their scale, use or interconnectedness with the financial system increases sufficiently.

The EBA will conduct ongoing supervisory activities, including off-site monitoring and planned on-site inspections. It will also establish and chair a supervisory college for the issuer, bringing together the relevant authorities to facilitate cooperation, information exchange and coordinated oversight.

For the wider digital-asset industry, the move demonstrates how MiCA's significance framework can result in direct involvement by an EU-level authority in the supervision of major stablecoin arrangements. While national regulators retain important responsibilities, the EBA's role introduces a more centralised approach to monitoring the financial resilience of issuers whose tokens may have a substantial impact on payments, liquidity and the broader financial system.

USDC's transition to dual supervision is therefore an important milestone in the EU's implementation of MiCA. It establishes a practical precedent for the treatment of significant e-money tokens and provides an indication of the more intensive prudential oversight that may apply to other stablecoins as the European market develops.

By fLEXI tEAM