EBA supervision shifts to USDC as MiCA rules reshape stablecoin market

The European Banking Authority (EBA) designated USDC, issued by Circle Internet Financial Europe SAS, as the first significant e-money token on October 14, 2026. This decision shifts direct supervision of USDC’s own funds, reserve assets, and liquidity from France’s ACPR to the EBA on November 12, 2026. While the ACPR maintains oversight of governance and conflicts of interest, the EBA now controls the most systemic components of the token’s management. This regulatory shift happens as payment rails integrate these instruments more deeply. An EBA and NYDFS memorandum of understanding connects EU and US supervision of the same token. Tether stays outside this structure because the company declined to obtain EU authorization. Tether’s refusal to adapt to MiCA requirements forced its delisting from several European venues in late 2024. These delistings occurred as regulators enforced strict rules for large stablecoins, which require issuers to hold reserves in EU bank deposits and maintain specific capital levels. Tether’s recent exposure to a liquidity crunch at EQIBank, a digital bank in Dominica, underscores the risks of offshore holdings. US authorities seized approximately 80% of EQIBank’s total monetary holdings from accounts tied to a payment processor, leaving the bank fighting to recover $89 million. Tether reported that this exposure is less than 0.034% of its total assets. The MiCA framework is a clear choice between regulatory compliance and market flexibility.

Stablecoin compliance and bank deposits

MiCA imposes distinct rules for e-money tokens (EMTs) and asset-referenced tokens (ARTs). EMTs, which reference a single fiat currency, require authorization as an electronic money institution or a credit institution. ARTs, which reference a basket of assets or multiple currencies, require a separate authorization from a national competent authority. Non-euro EMTs face transaction caps if they exceed one million transactions per day and 200 million EUR in aggregate daily value. If a token crosses these thresholds, the issuer must cease issuance until usage drops below the limit. The European Central Bank (ECB) currently proposes replacing the 60% bank deposit requirement for significant EMTs with a liquidity-based model. This proposal favors assets that mature within one to five working days over fixed deposit thresholds. The ECB suggests that overnight reverse repurchase agreements or short-term sovereign bonds could provide sufficient liquidity.

The EBA supervises significant tokens once they meet criteria such as having 10 million holders or an issuance value above EUR 5 billion. Issuers must also match maturities and credit quality to redemption obligations. Under current rules, issuers must publish a monthly attestation of the reserve composition and honor redemption requests at par. For non-significant tokens, the EBA’s regulatory technical standards say that no more than 25% of the cash reserve is with a single credit institution, a limit that drops to 10% for significant tokens.

Market divergence and regulatory pressure

The July 1, 2026 deadline ended the maximum transitional period for all crypto-asset service providers in the EU. Since that date, unlicensed firms must restrict onboarding or exit the market entirely. France leads the EU in authorization, holding five licenses and 26% of all EMT issuers. In contrast, Germany only authorized one issuer. A 21-bank consortium, including Goldman Sachs, Citigroup, and Bank of America, plans to launch a USD stablecoin in the first half of 2027. This group, which includes members from US, European, Japanese, and African banking groups, aims to capture market share from the current duopoly of Tether and Circle. Tether and Circle together control 85% of the $302.8 billion market. The consortium targets an addressable opportunity of $1.9 trillion, according to industry analysts. This move comes after the US Treasury proposed that issuing a payment stablecoin in the United States generally requires a federal or state license starting January 18, 2027. While the SEC uses enforcement actions to signal policy, MiCA provides a clear, rules-first framework. If you manage treasury reserves, you must monitor these shifts. Will the 21-bank consortium successfully challenge the existing duopoly?