The European Banking Authority has classified Circle's USDC stablecoin as a higher-tier e-money token under the EU's Markets in Crypto Assets (MiCA) rules, according to an announcement on October 14. USDC is the first e-money token in the European Union to receive this classification.
Under the new designation, USDC will face closer regulatory supervision than smaller tokens operating in the region. The stablecoin will be jointly overseen by the European Banking Authority and France's Autorité de Contrôle Prudentiel et de Résolution, the French agency responsible for banking and insurance supervision.
USDC is the second-largest stablecoin globally by market capitalization at approximately $73 billion, behind Tether's USDt at around $184 billion. Both tokens are pegged to the US dollar. According to reporting, only 45 other projects hold e-money token status in the EU region.
The decision reflects ongoing interest from EU-based token issuers in establishing regulated dollar-pegged stablecoins. Executives have argued that demand for dollar-denominated tokens remains strong in Europe, with some noting that euro stablecoins alone are insufficient for cross-border global payments by European corporations.
Separately, the European Central Bank continues development of a digital euro. The central bank digital currency was first proposed in 2020 and could be issued in 2029, pending completion of required legislation and a pilot program.
