EBA Makes USDC the EU's First Significant E-Money Token Under MiCA

The European Banking Authority classified Circle's USDC as a significant e-money token on Wednesday, the first stablecoin given that label under the European Union's MiCA regime. The effect is a split in who supervises what. From 12 November the EBA takes own funds, the reserve of assets, liquidity requirements and the recovery and redemption plans for Circle Internet Financial Europe SAS, the French company that issues USDC in the bloc. France's prudential supervisor, the ACPR, keeps corporate governance, qualifying holdings, outsourcing, conflicts of interest and the fitness tests applied to senior management. USDC is the first of 45 e-money tokens notified under the regulation to be designated.

What the label costs an issuer

Significance is a prudential category, and it arrives with extra liquidity, capital, stress-testing and reserve-management requirements, plus a standing obligation to show redemptions can be met when markets are strained. FinanceFeeds, reading the liquidity rules alongside the decision early on Thursday, is the only outlet in this sweep to attach a number to the part that bites. MiCA's ordinary reserve rule puts a minimum of 30% in bank deposits; for a significant token referencing an official currency, the framework can require at least 60%. That reading rests on one outlet.

Circle has been arguing against exactly that rule. Weeks before the designation it asked EU policymakers to revisit the requirement that part of a reserve sit in bank deposits, on the grounds that deposits carry bank risk and the rules should weigh liquidity more heavily. Roughly $3.3 billion of USDC reserves were temporarily out of reach when Silicon Valley Bank failed in 2023. The decision adopts none of that. It changes no existing MiCA rule.

Three figures for one stablecoin

Nobody publishes the same size for USDC. Cointelegraph, filing at 19:03 UTC on Wednesday, put the market capitalisation at $73 billion, and a nine-outlet comparison assembled the same day found roughly that number common to its sample. FinanceFeeds gives a different pair, $74.3 billion in reserves against $74.1 billion in circulation, dated 5 October. The live ticker on crypto.news' own page read $72.68 billion at the time of writing. Three measures, three as-of dates, and they do not reconcile. None is the figure the EBA used, because the authority did not publish one.

The thresholds are public, the arithmetic is not

A token must cross at least three of seven criteria set out in Article 43 before classification becomes mandatory under Article 56. RegReportingDesk, a specialist regulatory-reporting site and the only source in this sweep to print the numbers, lists holders above 10 million, size above EUR 5 billion, average daily transactions above 2.5 million and average daily transaction value above EUR 500 million among them. Those thresholds stand on a single source. What several outlets agree on is the gap the announcement leaves. The EBA named no criterion and published no decision date, so which of the seven USDC crossed is left to the reader. Article 117 is the provision that moves supervision itself.

"For European corporates to make cross-border payments globally, offering only a euro stablecoin isn't enough," said Alexander Hoptner, chief executive of AllUnity, in comments to Cointelegraph.

Everything still turns on 12 November

The transfer has not happened yet. The EBA says it has signed a memorandum of understanding with the New York State Department of Financial Services on cross-border stablecoin supervision, which matters because the EU issuer and the US issuer are separate companies; no signing date or terms are published, and the outlets do not agree on which of them reported the memorandum at all. The other European deadline is still running, with ESMA having told firms to drop non-compliant stablecoins by 8 January. Three days before this decision the Financial Stability Board told the G20 that cross-border oversight of these tokens is immature. What the classification settles is which issuer answers to Brussels directly. What it cannot settle is how that answer holds the first time a reserve is tested.