EBA gives Circle’s USDC significant-token status in EU

The European Banking Authority has classified Circle’s USDC as the European Union’s first significant e-money token under the Markets in Crypto-Assets Regulation, moving oversight of key financial safeguards to the EU level. The EBA announced the classification on Oct. 14, according to the authority’s notice, which was reported by The Block.

The change takes effect on Nov. 12. Until then, France’s banking supervisor, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), oversees the relevant areas. From that date, the EBA takes direct responsibility for Circle’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans. The ACPR continues to supervise governance, qualifying holdings, fitness and propriety assessments, and conflicts of interest.

What does “significant” change for USDC?

It changes which regulator leads on specific parts of the issuer’s safeguards. MiCA provides for EBA supervision of significant e-money tokens alongside the national authority; in USDC’s case, the two regulators divide responsibilities by subject. The Block reported that USDC is the first of 45 e-money tokens notified in the bloc to receive the classification.

The practical sequence is a handover of defined supervisory tasks, rather than a change to how USDC is issued. The EBA takes the reserve, liquidity, own-funds, and recovery and redemption oversight; the ACPR retains its assigned areas. For users, this is a little like two inspectors checking separate parts of the same operation: one authority’s new role does not erase the other’s.

How will the EBA and US authorities coordinate?

The EBA has also signed a memorandum of understanding with the New York State Department of Financial Services (NYDFS), which oversees Circle’s New York-regulated operations. The agreement is intended to support cross-border oversight and information exchange between the authorities, The Block reported.

That arrangement adds a channel for regulators in the EU and New York to share information about Circle’s operations under their respective supervision. The EBA’s new remit is limited to the areas specified for significant tokens; the agreement with NYDFS provides a separate framework for cooperation across jurisdictions.

What happens next?

The immediate date to watch is Nov. 12, when the EBA’s direct oversight of USDC’s reserves, liquidity, own funds, and recovery and redemption plans begins. The ACPR will continue handling governance and the other areas assigned to it. The classification changes the supervisory structure around USDC in the EU; the next step is the transfer of those responsibilities into that structure.

References

• the authority’s notice — eba.europa.eu
• The Block — theblock.co