Circle's USDC becomes the EU's first 'significant' stablecoin; EBA oversight starts November 12
The European Banking Authority takes direct supervision of USDC's reserves on November 12, the first such designation among 45 e-money tokens under MiCA. Tether never sought authorization, so USDC is the dollar stablecoin left standing on regulated EU venues, under reserve rules Circle spent October lobbying to rewrite.
Vincent Jiang · 3 min read
On October 14, 2026, the European Banking Authority (EBA) classified USDC, the dollar stablecoin of Circle+8.41% — Circle, up 8.41 percent today (NYSE: CRCL), as a significant e-money token under MiCA, the European Union's crypto rulebook 123. It is the first of 45 notified e-money tokens to carry the label 12. From November 12 the EBA replaces France's ACPR, the national regulator that licensed Circle in 2024, as direct supervisor of the issuer's own funds, reserves, liquidity and recovery and redemption plans 12. The ACPR keeps governance and fit-and-proper checks 12.
Europe's compliant dollar now has one landlord
The designation has no rival inside the fence. Tether's USDT, at $184 billion in circulation against USDC's $73 billion, never sought MiCA authorization, and major regulated EU platforms delisted it before July 1, 2026 13. Tether chief executive Paolo Ardoino has said the deposit rule is why 45. Only three of the world's 25 largest stablecoins are regulated under MiCA 45. From November, EU platforms listing USDC offer a token whose reserves answer to the EBA, not a national authority 1.
Circle is lobbying against the rules it just inherited
The rule at issue: MiCA obliges e-money token issuers to keep at least 30% of reserves in commercial bank deposits, and the floor rises to 60% for significant tokens 45. USDC's new label moves it into the 60% tier. The designation also touches the way USDC is built: a French Circle entity issues the coin to European holders and a US entity to everyone else, as one fungible token 2.
Circle's October 1 response to the European Commission's MiCA review, filed two weeks before the designation, asks for the deposit mandate to be replaced by a flexible liquidity requirement 25. It argues compulsory deposits concentrate bank credit risk, and it wants a 35% single-sovereign cap and a 1.5%-of-bank-assets deposit ceiling scrapped as well 45. The argument has unlikely company: Circle lines up with the European Central Bank, and it echoes Tether's 45. The EBA, meanwhile, wants that two-entity structure tightened 4.
The coin grew 19%; the income grew 7%
The economics explain the urgency. USDC in circulation hit $73.3 billion at the end of June 2026, up 19% year on year, after $77.0 billion at the end of March 16. Second-quarter revenue and reserve income rose 7% to $701 million 6. About 95% of that is interest on the reserves, and yields near 3.5% mean a bigger float earns less per dollar 7.
The bigger leak is distribution. Distribution, transaction and other costs took $412 million of the quarter's $701 million, paid largely to the partners that circulate the coin 6. Binance alone bought a $100 million stake in September alongside a five-year deal paying it monthly incentives tied to USDC balances 13. Net income was $48 million 6.
Circle's revenue has gone sideways since its $770 million Q4 2025 peak
Data
| Revenue and reserve income | |
|---|---|
| Q3 '24 | $445.76M |
| Q4 '24 | $435.37M |
| Q1 '25 | $578.57M |
| Q2 '25 | $658.08M |
| Q3 '25 | $739.76M |
| Q4 '25 | $770.23M |
| Q1 '26 | $694.13M |
| Q2 '26 | $701.32M |
Distribution costs consumed most of Circle's Q2 revenue
Data
| Value | |
|---|---|
| Revenue and reserve income | $701.3M |
| Distribution, transaction and other costs | $412M |
| Adjusted EBITDA | $143M |
| Net income | $48M |
What November settles
Circle reports third-quarter results on November 4, 2026, against other-revenue guidance of $310 million to $330 million 6. CFO Jeremy Fox-Geen, more than five years in the seat and a $1.2 billion IPO behind him, leaves at the end of December 8. The supervisory handover binds on November 12 1. The tell is whether the EBA's first acts touch the 60% deposit floor that comes with significance. EU venues and holders get the safer coin. Circle's shareholders carry the cost of keeping it that way.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
