EU Regulator Classifies Circle’s USDC as Significant Token

The European Banking Authority classified Circle’s USDC stablecoin as a significant e-money token under the European Union’s Markets in Crypto-Assets framework on Wednesday. The designation places USDC under the joint supervision of the EBA and France’s Autorité de Contrôle Prudentiel et de Résolution, or ACPR.

The EBA notice said the classification applies to e-money tokens that meet MiCA’s significance criteria. The designation has been granted to 45 other projects.

USDC is the second-largest stablecoin by market capitalization, with about $73 billion in circulation. Tether’s USDt has approximately $184 billion in circulation.

The classification comes as token issuers in the European Union seek rules for U.S. dollar-pegged stablecoins. Stable Mint CEO James Bennett said Europe could not “wish away” dollar stablecoins and that regulators could set safeguards and requirements for issuers.

AllUnity CEO Alexander Höptner said that offering only a euro stablecoin would not be enough for European companies making cross-border payments worldwide.

Under MiCA, stablecoin issuers must meet requirements covering authorization, reserves and consumer protection. The EBA and France’s ACPR will share supervisory responsibilities for USDC and its issuer within the EU regulatory framework.

European authorities are also examining a digital euro, a central bank digital currency intended to provide a public digital form of the euro. The European Union proposed the project in 2020. A possible launch in 2029 would depend on the completion of legislation and a pilot program.