Circle’s USDC will become the first token classified as a “significant” electronic money token under the European Union’s MiCA regulation and will come under joint supervision starting November 12.
According to Wu Blockchain, the European Banking Authority (EBA) has granted this status to USDC for the first time, among 45 reported electronic money tokens. For USDC, the world’s second-largest stablecoin by market capitalization, the decision means supervisory responsibilities will be shared between the EBA and France’s supervisory authority, the ACPR.
The EBA will supervise USDC’s reserves
Under the new framework, which takes effect on November 12, the EBA will directly supervise capital, reserves, and liquidity. This will bring the assets backing the token and the financial preparations for meeting redemption requests under the oversight of the European-level authority.
The EBA’s responsibilities will also include recovery and redemption plans. These plans cover the steps to be taken in the event of financial distress and the procedures for reimbursing token holders.
France’s supervisory role will continue
France’s ACPR will continue to supervise governance and other operational matters. The new framework will divide responsibilities between the two institutions, with one overseeing USDC’s financial obligations and the other its management and operations.
Not investment advice.