💯 EU🇪🇺: USDC stablecoin🇺🇸 receives “significant token” classification from the European Banking Authority (EBA)

💯 EU🇪🇺: USDC stablecoin🇺🇸 receives “significant token” classification from the European Banking Authority (EBA)

The EU has 45 electronic money tokens (EMTs) registered under the requirements of the European Union’s Markets in Crypto-Assets Regulation (MiCA). However, the token issued by Circle has become the first stablecoin to receive the “significant” classification.

▶️ Financial requirements: the issuing company’s capital, in this case Circle Internet Financial Europe SAS, the company’s European subsidiary, must amount to 3% of the average value of reserve assets, which must, in turn, be segregated from customer funds. The company must also undergo an independent audit of its reserves every 6 months. However, the «significant token» classification does not mean that USDC is considered an insured bank deposit.

▶️ Supervisory responsibilities will be shared between the French Prudential Supervision and Resolution Authority (ACPR) and the EBA.

▶️ The European Banking Authority will oversee financial safeguards, including the issuer’s own funds, reserve assets, liquidity requirements, and token recovery and redemption plans.

▶️ The ACPR will retain oversight of corporate governance and qualifying holdings and will continue to assess the issuing entity’s compliance with applicable requirements. Its remit also covers outsourcing and conflicts of interest.

▶️ Worth noting: in May, Circle obtained a conditional license from the French Financial Markets Authority🇫🇷 (AMF), allowing it to operate in the European Union as a crypto-asset service provider. To fully conduct its planned activities, the company needs an electronic money institution license, which it also appears likely to obtain.

USDC’s classification reflects the EU’s financial supervisory framework for stablecoin issuers.

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