The European Banking Authority (EBA) has classified Circle's USDC stablecoin as a significant e-money token under the Markets in Crypto-Assets (MiCA) regulation. The decision introduces enhanced regulatory oversight for one of the largest U.S. dollar-pegged stablecoins in the cryptocurrency market.
According to the regulator's press release, USDC will now be jointly supervised by the EBA and France's Prudential Supervision and Resolution Authority (ACPR). Only 45 other projects had previously received a similar classification.
USDC ranks second among stablecoins by market capitalization, with approximately $73 billion in circulation, compared to $184 billion for market leader Tether's USDT.
Europe needs dollar-pegged stablecoins
The EBA's decision comes amid growing interest among European companies in regulated U.S. dollar-pegged stablecoins. Market participants believe these assets are essential for international settlements, as relying exclusively on euro-pegged digital currencies limits business opportunities.
Stable Mint CEO James Bennett noted that Europe cannot simply eliminate dollar-pegged stablecoins. However, regulators can establish requirements for issuers and ensure adequate safeguards for users.
AllUnity CEO Alexander Höptner expressed a similar view. According to him, euro-backed stablecoins alone are insufficient for European companies seeking to make cross-border payments worldwide.
Meanwhile, the European Central Bank continues to develop the digital euro. The initiative was first proposed in 2020, with a potential launch of the central bank digital currency being considered for 2029. Before then, European authorities must finalize the legislative framework and conduct pilot testing.
EU prepares to review MiCA
Unlike Circle, Tether has refused to bring its USDT stablecoin into compliance with MiCA. As a result, major cryptocurrency exchanges have begun restricting USDT trading for European users. Moreover, on October 8, the European Securities and Markets Authority (ESMA) called for an end to services involving stablecoins that do not comply with MiCA.
At the same time, the EU is already discussing a possible review of MiCA. The European Commission has held consultations with market participants to assess the effectiveness of the existing rules and determine whether changes are needed. In September, the EBA and ESMA also submitted proposals to update the regulatory framework. However, there are currently no plans to lift restrictions on USDT. Regulators are considering both simplifying certain requirements and strengthening oversight of stablecoins.
As a reminder, Bitpanda believes that MiCA boosts confidence in regulated cryptocurrency platforms.
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