EU Regulators Classify Circle’s USDC as a Significant Stablecoin

The European Banking Authority (EBA) has designated Circle’s USDC as a “significant e-money token” under the European Union’s Markets in Crypto-Assets (MiCA) regulation, bringing the stablecoin under closer regulatory supervision.

In a notice published Wednesday, the EBA said the classification places USDC under the joint oversight of the European banking regulator and France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR). The designation applies to tokens that meet specific thresholds under MiCA and reflects the growing scale of USDC within the digital asset market.

USDC is the world’s second-largest stablecoin by market capitalization, valued at approximately $73 billion. It remains behind Tether’s USDt, which has a market capitalization of around $184 billion. The EBA said USDC is among a group of 46 projects that have received the significant e-money token classification.

The decision comes as European crypto companies and financial institutions seek clearer rules for dollar-backed stablecoins operating in the region. While EU policymakers have promoted euro-denominated digital assets, industry executives argue that dollar-pegged tokens remain essential for international payments and cross-border business.

Stable Mint CEO James Bennett previously said Europe could not simply eliminate dollar stablecoins from the market but could establish safeguards and rules governing their issuers.

AllUnity CEO Alexander Höptner has also argued that euro-backed stablecoins alone cannot meet every corporate payment requirement. Companies conducting international transactions need access to dollar-based digital assets to operate across global markets, he said.

The growing regulatory acceptance of dollar stablecoins presents a challenge for European policymakers seeking to strengthen the euro’s position in digital finance. US dollar-backed tokens continue to play a major role in crypto trading, settlements and transfers, making their regulation an important part of the EU’s digital asset strategy.

Meanwhile, the European Central Bank (ECB) continues to explore the development of a digital euro. The central bank digital currency was first proposed in 2020 and could be issued in 2029, depending on the completion of the necessary legislation and a pilot program.

The digital euro initiative is intended to provide a public digital payment option backed by the central bank. Its development is progressing alongside the EU’s efforts to establish a regulatory framework for private stablecoins.

With USDC now classified as a significant e-money token, European and French authorities will have a more direct role in supervising one of the largest dollar-backed stablecoins operating in the region.