$USDC Multi-Issuance Faces Scrutiny in Brussels

The European Central Bank (ECB) is pushing for changes to how stablecoins like USDC are issued and redeemed, citing concerns about a potential drain on reserves in the event of a crisis.

The ECB's concerns center around the fact that some issuers, such as Circle, have obtained an EU license through a French entity but continue to issue tokens outside of Europe. This has led to a situation where European redemption rules are being applied globally, potentially putting a strain on reserves meant for EU circulation.

As a result, the ECB is pushing for stricter reserve rebalancing and redemption gates, which would require non-EU issuers to hold more reserves in the EU and route redemptions through EU-licensed exchanges and custodians. The European Parliament has voted 390-86 to keep multi-issuance alive with safeguards, but the final decision will be made by the Commission after reviewing industry feedback.

The consultation on multi-issuance is ongoing until August 31, 2026, with a report due by mid-2027. If changes are implemented, it could lead to a hard split in the token price between inside and outside the EU.