Circle’s legal terms allow it to pause redemptions of European USDC when reserve assets need to cross a border for rebalancing and that transfer is blocked. An update reported on 5 October 2026 set out the possibility of a temporary delay under the European Union’s Markets in Crypto-Assets, or MiCA, stablecoin rules.
The provision matters because Circle has operated USDC through two issuers since 1 July 2024: Circle Internet Financial, LLC outside the European Economic Area, and Circle Internet Financial Europe SAS within it. European issuance and redemption run under terms separate from those governing markets outside the EEA.
Circle secured its MiCA licence through its French entity, enabling it to co-issue USDC across the EEA. It has kept a substantial portion of the reserves in US Treasuries held outside the Eurozone. That arrangement means a European redemption can depend on transfers between Circle’s operations if their reserves need rebalancing.
The company’s French issuer is an ACPR e-money institution incorporated in France, with RCS Paris 953 990 934, and appears on the ACPR’s REGAFI register. Circle is defending cross-border co-issuance under MiCA.
MiCA requires strict reserves, segregation of funds and redemption at par. Circle’s terms preserve the option to defer European redemptions when it cannot rebalance reserves with Circle LLC.
For retail customers in the EEA, the stated redemption payout time is up to 5 business days after verification as of September 2026. Circle can find discrepancies, and third-party bank fees may apply. A holder retains the right to redeem at par, though an immediate sale in the secondary market relies on a buyer willing to provide cash.
Circle says its reserves sit in segregated US accounts at US-regulated financial institutions, separate from corporate funds. Holders receive no interest. The reserve pool includes cash and short-dated government instruments, including investments in the BlackRock-managed Circle Reserve Fund.
The Circle Reserve Fund is a government money market fund that invests in Treasury securities and overnight Treasury repurchase agreements. BNY is its custodian.
Outside the EEA, Circle’s published terms generally require a Circle Mint account in good standing for direct redemptions. As of December 2025, Circle committed to redeeming 1 USDC for 1 USD through such an account, subject to its terms, applicable law and any fees.
Concern over the structure has precedent in official policy papers. A European Parliament briefing from 2021 said cross-border co-issuance needed “additional safeguards” to maintain continuous redemption liquidity. A 2025 stablecoin framework paper from the US Securities and Exchange Commission warned that fragmented oversight could produce “asymmetric redemption risks”.
USDC’s average quarterly circulation reached an all-time high in the second quarter of 2026. The terms now set out the point at which the token’s cross-border structure could affect the timing of access to dollars for European holders.
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