Circle Internet Financial Europe SAS faces a requirement to keep bank deposits equal to at least 60% of the value referenced by the USD Coin (USDC) it issues in Europe after an EU regulatory designation.
The European Banking Authority (EBA) announced Oct. 14 that it had classified USDC as a significant e-money token. It was the first to receive that status among 45 e-money tokens notified under the EU’s Markets in Crypto-Assets Regulation (MiCA) as of the announcement.
The higher deposit floor applies to electronic money institutions issuing significant tokens. MiCA’s standard minimum is 30%; for Circle’s French issuer, the significant-token requirement is twice that level. The 60% is measured against the value referenced by its European USDC issuance, rather than against the size of its existing reserves.
The obligation concerns Circle’s French entity. A separate issuer, Circle Internet Financial, LLC, is responsible for USDC outside the European Economic Area (EEA). The French entity’s deposit floor does not apply to reserves held by that separate issuer.
Circle began issuing USDC in the EU through its licensed French company in July 2024. The classification therefore changes the requirements for an operation already under way. Under Circle’s redemption policy, the French entity handles EEA requests, while Circle Internet Financial, LLC, handles requests from outside the EEA.
Circle’s policy provides for EEA redemptions at par, subject to identity and transaction checks. Electronic money institutions issuing significant tokens also face additional capital and liquidity requirements and must arrange an independent reserve audit every six months.
The Autorité de Contrôle Prudentiel et de Résolution (ACPR), France’s prudential regulator, retains oversight of governance, outsourcing and conflicts of interest. On Nov. 12, the EBA will assume oversight of the French issuer’s own funds, reserve assets, liquidity and recovery and redemption plans.
