EBA makes Circle’s USDC EU’s first significant MiCA token
The EBA made USDC the EU’s first significant e-money token, shifting oversight of its reserves and liquidity to EU-level supervision from November 12.
The Splyt Genesis Desk
The European Banking Authority classified Circle’s USDC as the first significant e-money token among 45 notified in the EU, with new supervisory powers taking effect November 12, according to The Block’s report on the EBA decision. The classification is under the EU’s Markets in Crypto-Assets Regulation, or MiCA.
The EBA announced the decision on October 14. It applies to USDC issued in the EU by Circle Internet Financial Europe SAS. USDC is also issued in the United States by Circle Internet Financial, LLC, the EBA said.
What changes for USDC’s supervision on November 12?
From that date, the EBA takes direct responsibility for supervising the issuer’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans. Those areas currently sit with France’s Autorité de Contrôle Prudentiel et de Résolution, or ACPR.
The change is a division of oversight between EU and French regulators. The ACPR will continue to supervise governance, qualifying holdings, fitness and propriety, outsourcing, and conflicts of interest. The EBA and ACPR will work together during the transition, the authority said.
Why does MiCA call USDC “significant”?
Under MiCA, the label puts USDC into a supervisory framework for tokens deemed significant under the regulation’s criteria. The EBA says it assesses tokens against those criteria and reviews classifications annually. Its announcement, reported by The Block, identifies USDC as the first significant e-money token out of 45 EMTs notified in the EU.
The designation changes who oversees parts of Circle’s EU stablecoin operation. It does not mean that every e-money token notified under MiCA has received the same status: the EBA said USDC is the first classified as significant.
What does the US regulator agreement cover?
The EBA has also signed a memorandum of understanding with the New York State Department of Financial Services. The agreement is intended to support cooperation and information exchanges between the EU and New York regulators on cross-border stablecoin activity, the authority said.
For you, the next date to watch is November 12, when the EBA’s new supervisory responsibilities begin. The signal will be how the EBA and ACPR put the shared oversight arrangement into practice.
Source material
- The Block’s report on the EBA decision — theblock.co