Introduction
European Union (EU) financial authorities are increasingly concerned about multi-issuer stablecoin models. In these models, the same coin is issued by entities both inside and outside the EU, with reserves and issuance obligations spread across different jurisdictions. Regulators point to liquidity problems and potential collapse risks that may arise from the lack of coordination of these structures in times of crisis.
In its October 2025 report, the European Systemic Risk Board (ESRB) emphasized that such models have built-in vulnerabilities for financial stability. Accordingly, it is recommended to develop a policy to ban multi-issuer stablecoins. Thus, the European Union seeks to reinforce the principle of single liability and full supervision in cryptoasset markets.
Which Stablecoins Work with the Multiple Issuer Model?
The multi-issuer model refers to the simultaneous issuance of the same stablecoin by multiple licensed or unlicensed entities in different jurisdictions. While this structure may look like a single entity from the investor’s perspective, it relies on different reserve governance mechanisms, which creates legal and operational risks.
The most discussed example of this model on the European Union’s agenda is the USDC. Circle maintains both a US-based issuance structure and offers the same stablecoin to the market through a licensed issuer in Europe. This falls under the regulators’ definition of multiple issuers and creates supervisory confusion on the EU side. Circle’s EU subsidiary operates in France with an electronic money institution (EMI) license, but its USDC stablecoin is also backed by US reserves.
Similarly, Circle’s EURC stablecoin is being developed as a European-focused product, but as its international reach expands, this coin may also be subject to multiple issuance dynamics . This structure is under constant supervision by European regulators for compliance with the local reserve and the principle of individual responsibility.
EU’s Grounds for Prohibition
The tendency of European Union regulators to ban multi-issuer stablecoin models is based on several key justifications.
First and foremost, concerns over reserve mismatch and liquidity management are at the forefront. Reserves held in different jurisdictions are not subject to the same supervisory standards, increasing the risk of loss of confidence and a sudden unwinding during crises. As investors flock to issuers within the EU, there is intense demand pressure on these units, creating a potential liquidity crisis.
Second, supervisory and compliance gaps are seen as a significant problem. Since issuance activities outside the EU cannot be assessed within the scope of MiCA (Markets in Crypto-Assets Regulation), this situation brings the risk of regulatory arbitrage. When issuers subject to different supervisory frameworks offer the same coin to the market, this leads to a loss of transparency in the financial system.
Thirdly, the issue of legal liability and liability confusion draws attention. In multiple issuance models, it becomes unclear for investors which issuer is liable for which obligation. This situation creates a serious weakness in terms of investor protection.
Finally, the systemic risk factor comes to the fore. The collapse of large-scale stablecoins may have knock-on effects, especially in the payments system. The ESRB recommends that strict EU-wide restrictions should be applied to avoid this possibility.
MiCA Regulation
MiCA is a comprehensive legal framework for the regulation of crypto assets in the European Union. Adopted in 2023, the regulation entered into force by the end of 2024 for stablecoin issuance processes.
MiCA evaluates stablecoins under two main categories:
- EMT (Electronic Money Token): Coins that are pegged one-to-one to a specific fiat currency.
- ART (Asset-Referenced Token): Coins that are based on a basket of multiple assets or fiat currencies.
This classification requires stablecoin issuers to operate under the same standards as licensed electronic money institutions. MiCA requires issuers to undertake strict obligations on reserve management, capital adequacy, liquidity planning and regular reporting.
However, MiCA does not explicitly define or prohibit the multi-issuer model. This makes it difficult to resolve the jurisdictional confusion that arises when global actors such as Circle issue the same coin both inside and outside the EU. The ESRB’s report therefore emphasizes that this regulatory gap in MiCA needs to be addressed.
Stablecoins Compatible with MiCA
Circle was the first to issue MiCA-compliant stablecoins. The company was licensed as an electronic money institution by the ACPR (Autorité de Contrôle Prudentiel et de Résolution) in France in mid-2024. This authorization allows USDC and EURC to circulate legally in the European Union.
USDC falls under MiCA’s EMT definition as a token backed by reserves against the US dollar, while EURC is backed by reserves against the Euro and is similarly categorized as an EMT. Both tokens fulfill full reserve, regular audit and transparency reporting obligations.
However, due to Circle’s US-based operations, there is still a possibility that USDC could be considered under the multi-issuer model. This situation is being closely monitored by EU regulators and additional restrictions are expected to be imposed if deemed necessary.
The number of stablecoins approved under MiCA is currently limited and only a few institutions licensed in the EU operate under this framework. This shows that the EU is determined to tightly regulate the stablecoin market.
Conclusion
The European Union’s tough stance on multi-issuer stablecoin models reflects its aim to maintain stability in the digital financial system. The issuance of the same stablecoin by different institutions in multiple regions can lead to fragmentation of reserves and weak liquidity management. This structure has the potential to undermine investor confidence and magnify systemic risks. For this reason, the ESRB and other regulators consider the prohibition of multi-issuer models as imperative for maintaining financial stability.
The MiCA regulation brings transparency and accountability to the stablecoin market, but does not remove the uncertainty around multi-issuer models. The fact that companies like Circle offer stablecoins both through licensed issuers in Europe and on a global scale shows that this boundary needs to be redrawn.
As of today, MiCA-compliant stablecoins only include USDC, EURC, USDR and EURR issued by licensed issuers within the EU. This is an indication of Europe’s commitment to digital stability in its currency. However, the regulatory framework is expected to tighten further in the future.
As a result, the European Union’s stablecoin policy appears to be getting stricter. The trend towards banning multi-issuer models is seen as necessary for investor protection and financial stability, but it also limits global stablecoin innovation in the European market. Maintaining this balance remains one of the most critical tests of the EU’s digital finance strategy going forward.
