Circle's terms can delay a European USDC redemption
Circle's terms can delay a European USDC redemption when reserves cannot cross a border. MiCA still pays at par, at any time, and keeps 30% of funds in banks.
Circle's terms allow it to delay a European USDC redemption when the reserves behind USD Coin (USDC) cannot be moved across borders. CryptoSlate reported on October 5, 2026 that the issuer can defer the redemption if a reserve transfer fails, that the dollar claim remains, and that the contingency can still delay the cash. The Markets in Crypto-Assets Regulation (MiCA) tells an e-money token holder to expect funds at any time and at par, then tells the issuer to keep at least 30% of those funds in a bank.
A report on this desk on Bank for International Settlements (BIS) working paper 1370 found stablecoin flows shrugging off capital controls. USDC can move. The deposit that Article 54 requires the issuer to hold cannot, if the credit institution will not send it.
At any time, and at par
Article 49(4) of Regulation (EU) 2023/1114 states:
Upon request by a holder of an e-money token, the issuer of that e-money token shall redeem it, at any time and at par value, by paying in funds, other than electronic money, the monetary value of the e-money token held to the holder of the e-money token.
Article 49(3) requires issuance at par value and on the receipt of funds. Article 53(2) requires the marketing to state that holders have a right of redemption at any time and at par value. Article 48(2) deems e-money tokens to be electronic money. Article 49 names no border and no number of days. The October 5 descriptions do not say how long Circle may delay the cash.
The 30% sits in the regulation
Article 54, in the Official Journal text, covers funds received for e-money tokens and safeguarded under Article 7(1) of Directive 2009/110/EC. At least 30% of the funds received "is always deposited in separate accounts in credit institutions". The rest goes into secure, low-risk assets that qualify as highly liquid financial instruments, denominated in the same official currency the token references. For USDC that currency is the dollar, so the non-bank slice cannot be moved into euro paper just to ease a transfer inside the euro area.
Decrypt reported on October 2, 2026 that Circle had answered the European Commission's MiCA review and described the rule as at least 30% in commercial bank deposits, rising to 60% for tokens deemed significant. The 30% is Article 54. The 60% is Article 45(7)(b), a floor for European Banking Authority (EBA) liquidity standards on significant asset-referenced tokens. Article 58(1)(a) subjects electronic money institutions issuing significant e-money tokens to Articles 36, 37, 38 and 45(1) to (4). It does not apply Article 45(7).
Circle's filing, and the venues already on USDC
On Decrypt's account, Circle argued that the mandate increases banking-sector credit risk and sided with the European Central Bank in asking for a liquidity requirement instead. Circle noted that only three of the top 25 stablecoins by market value are MiCA-regulated, and asked to preserve multi-issuance, with an EU-authorised firm and a foreign-regulated firm co-issuing one token. A co-issued reserve is one reason the cash would have to cross a border. The October 5 reports do not quote the clause as a multi-issuance term.
They also record no change from venues already using the coin. Marex has cleared a first USDC-margined US derivatives trade. Interactive Brokers' stablecoin rail, as reported on this desk, carries USDC and leaves out $183 billion of Tether (USDT). The delay separates a par claim from funds a margin desk can use. The Financial Accounting Standards Board (FASB) cash-equivalent tests are the accounting version of that split.
A recovery plan is a different switch
Article 55 applies the asset-referenced recovery-plan chapter to e-money token issuers. Article 46 lets that plan include liquidity fees on redemptions, a limit on the amount redeemed on any working day, and suspension of redemptions. Article 46(4) lets the competent authority suspend redemption temporarily where the issuer is failing the reserve rules, or is likely to, if holders' interests and financial stability justify it. The October 5 clause is Circle's, and the trigger is a reserve that cannot be moved across borders.
If the Commission cuts the Article 54 share that must sit in credit institutions, less of the reserve sits where a border can trap it. If the 30% floor stays, a European USDC redemption is still a claim at par, and the cash can wait on a transfer the October 5 descriptions do not time.
This article is informational analysis only and is not financial, investment, or trading advice. Cryptocurrencies are highly volatile and can lose substantial value rapidly. Past performance and historical patterns do not guarantee future results. Do your own research and consult a regulated financial adviser before making any investment decision.
Reporting by Karthik Subramanian. Filed 6 October 2026, 13:03 GMT.
Digital Assets Correspondent
Karthik Subramanian is a founder, writer, and technology consultant with nine years in the crypto ecosystem.
