The EBA takes over supervision of EU-issued USDC reserves and capital on Nov. 12. France keeps other supervisory duties, while Circle's proposed reserve-rule changes remain undecided.
The handover covers specific parts of Circle's European operation, not the issuer's full set of regulatory obligations. France's ACPR retains governance oversight and several other responsibilities. Circle's proposals to change reserve rules remain under review.
The EBA announced on Oct. 14 that USDC issued by Circle Internet Financial Europe SAS is the EU's first significant e-money token under the Markets in Crypto-Assets Regulation, or MiCA. It received that designation among 45 e-money tokens notified under the regulation. The EBA set out the classification in its Oct. 14 announcement.
From Nov. 12, the EBA will supervise the EU issuer's own funds, meaning its regulatory capital, and its reserve of assets. Its remit will also cover liquidity requirements. The agency will oversee recovery and redemption plans, which set out how the issuer would respond to financial stress and how holders could seek redemption. The designation came less than a month before the scheduled start of the EBA's direct supervisory responsibilities.
The ACPR keeps responsibility for governance and qualifying holdings. It will assess whether people in relevant roles are fit and proper. Outsourcing and conflicts of interest also remain within the French regulator's remit. The EBA says the two regulators will cooperate during the transition.
This handover divides supervisory duties; it does not move every aspect of Circle's European operations to the EU agency. The change applies to Circle's EU issuer. A separate EU oversight proposal concerns possible direct supervision by ESMA of certain large cross-border crypto firms. That proposal is distinct from the EBA's scheduled USDC responsibilities under MiCA.
MiCA's existing Article 54 framework requires credit institutions to keep at least 30% of funds received in exchange for e-money tokens in separate accounts. The remainder must go into specified instruments denominated in the currency referenced by the token. Those instruments must be secure and low-risk, as well as highly liquid.
In its Oct. 1 response to the European Commission's MiCA review, Circle argued for a more flexible minimum asset-liquidity requirement instead of mandatory minimum bank deposits. The company says deposit requirements can expose stablecoin issuers to banks' credit risk and counterparty risk. Circle describes the deposit floor as 30% of reserve assets for e-money token issuers. For significant-token issuers, it puts the floor at 60%.
Circle also wants to remove the 35% cap on exposure to one sovereign. It seeks an end to the banking-counterparty cap, which is measured against 1.5% of a bank's total assets. Circle argues that the limit could force larger issuers to maintain relationships with dozens of banks. These remain company recommendations. The EBA's Nov. 12 handover does not change the statutory reserve baseline.
The EBA identifies Circle Internet Financial Europe SAS and Circle Internet Financial, LLC as separate issuers for the EU and United States. Circle's USDC white paper likewise says the European entity holds reserves for European Economic Area holders. The U.S. entity holds reserves for holders outside that area. The tokens are fungible, but a global circulation figure does not measure the European issuer's reserve portfolio.
Circle's consultation response asks Europe to preserve multi-issuance and formalize safeguards, including dynamic rebalancing between global and EU-specific reserves. Separately, the EBA says it signed a memorandum with the New York State Department of Financial Services to support cooperation and information exchange on stablecoin activities.
The EBA's Oct. 14 designation and the Nov. 12 transfer of specified duties are the two dated milestones. USDC was classified as the first significant token among 45 notified e-money tokens. That figure counts notified tokens, not issuers or the entire stablecoin market. Neither the designation nor the handover adds a peg guarantee or insurance. The announcement does not tell holders to move funds, and it does not automatically change redemption terms. Circle's white paper excludes EU deposit-guarantee and investor-compensation coverage.
For U.S. readers, the change concerns the European issuer and its MiCA obligations. It does not establish a new U.S. rule. Reserve assets support an issuer's obligations, but the information here does not promise a particular recovery for every holder in every circumstance. The next scheduled change is the Nov. 12 transfer of specified supervisory responsibilities to the EBA.
