Circle's EU-issued USDC transitioned to direct supervision by the European Banking Authority (EBA) on November 12, according to the company's quarterly filing. The move follows the EBA's October 14 classification of EU-issued USDC as a significant e-money token under the Markets in Crypto-Assets Regulation (MiCA).
Under the new supervisory arrangement, the EBA oversees the financial safeguards of USDC issued by Circle Internet Financial Europe SAS, including regulatory capital, reserve assets, liquidity requirements, and recovery and redemption plans. France's Autorité de Contrôle Prudentiel et de Résolution (ACPR) retains responsibility for governance, qualifying holdings, fit-and-proper assessments, outsourcing arrangements, and conflict-of-interest management.
Circle warned in its filing that the EBA's direct supervision may require additional regulatory capital or liquidity to be held in the EU and could increase compliance costs. The company stated it is evaluating the potential impact but provided no financial estimates in the disclosure.
The significant e-money token classification under MiCA may also trigger increased prudential requirements for the issuer. Circle described USDC as the first e-money token to receive this EBA designation.
The filing noted an EBA memorandum of understanding with the New York State Department of Financial Services to facilitate cooperation and information exchange on cross-border stablecoin activities. Circle said the transfer of supervisory responsibilities does not alter redemption arrangements or holder fees for USDC.
