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Circle could delay European USDC redemptions amid reserve transfer issues
Circle’s European redemption policy includes contingency delays during reserve rebalancing if reserves cannot move between its French and U.S. issuers.
European USDC holders seeking dollars from Circle could face delays if reserves cannot move between Circle’s French and U.S. issuers, even though holders would retain their claim to a dollar. CryptoSlate reports Circle’s current European redemption policy allows temporary delays during failed reserve rebalancing.
The policy points to a potential cash access boundary within a token designed to be interchangeable worldwide, according to CryptoSlate. Circle is also arguing to preserve cross-border co-issuance under Europe’s MiCA review, saying the structure keeps global stablecoin liquidity within Europe’s regulatory perimeter.
Circle’s terms include controls that differentiate authorized crypto service providers from other EEA holders, CryptoSlate adds. Providers may face a redemption cap based on previously reported holdings, while other holders may face checks to confirm their holdings originated within the EEA before the stress began.
CryptoSlate notes that the public documents reviewed do not establish an active reserve-transfer failure, or an imposed reserve-stress redemption restriction, as of Oct. 4. The article also references Circle’s Oct. 1 response to the European Commission’s MiCA review process.