Circle Moves USDC Reserve Oversight to EU Authority

Circle has transferred the oversight of financial safeguards for USDC issued in the European Union to the European Banking Authority. The process, which became official on November 12, centralizes control over reserves and redemption plans within the bloc's regulatory body.

This shift stems from the classification of USDC as a significant electronic money token under the MiCA regulation. The European Banking Authority formalized this decision on October 14 and established a new framework for digital assets on the continent.

While the European Banking Authority manages own funds and liquidity requirements, the French Prudential Supervision and Resolution Authority retains responsibilities regarding governance. The French agency continues to oversee conflicts of interest and the qualification of the company's holdings.

The transition may increase operational and compliance costs for Circle France. The company is currently evaluating the financial impact of these new regulatory obligations without defining specific figures at this time.

Stricter oversight of global stablecoins could raise issuance costs and affect the asset's liquidity in the crypto market.