Circle obtains French AMF MiCA authorization: How compliance moat drives European market expansion

The stablecoin industry has long been viewed by the market as a competition of the “issuer model”—whoever has a larger circulating supply of stablecoins and reaches more blockchain networks holds the advantage. But after the GENIUS Act is passed in 2025 and MiCA enters full enforcement in 2026, the rules have undergone a fundamental change. The shift from a “regulatory vacuum” to “regulation across the entire jurisdiction” means that compliance capability is no longer a bonus—it is a ticket to entry for stablecoin issuers.

In May 2026, the total global market capitalization of stablecoins surpassed $320 billion, up nearly 30% from roughly $250 billion in 2025. In this fast-expanding track, compliance has replaced issuance timing and blockchain coverage as the new competitive variable. Circle has chosen a differentiated path with regulatory compliance as its moat: in the European Union, it moves USDC and EURC into MiCA’s compliance framework; in the United States, it pushes legislation to establish an institutional foundation for stablecoins; and then, as a publicly listed company, it accepts the test of financial transparency.

Three sets of data can initially show market feedback for this strategy. From early 2026 to date, Circle’s stock price has risen cumulatively by about 40%, and based on the current trend, it is expected to enter a more critical phase of market validation after the release of its Q1 earnings report. Behind these figures lies a deeper question—Is compliance ultimately a cost or a barrier? This article will break down Circle’s expansion logic across three levels: the compliance framework, the competitive landscape, and financial validation.

On the eve of full MiCA enforcement in the EU, which key license did Circle secure?

On April 20, 2026, Circle’s French subsidiary officially received approval from the French Financial Markets Authority (AMF), obtaining the status of a crypto asset service provider under the MiCA framework. Pursuant to Article 60(4) of MiCA, Circle France may provide custody and transfer services for stablecoins USDC and EURC to clients across the entire European Economic Area. The coverage includes all 27 EU member states, as well as Iceland, Liechtenstein, and Norway.

The timing of landing this license is not coincidental. The transition period under MiCA regulations ends on July 1, 2026. From then on, any entity that provides crypto asset services to EU clients without having obtained a MiCA license will be in violation of the law and must stop the relevant business. With the compliance deadline less than two months away, Circle locked in a first-mover compliance advantage in Europe by securing the CASP license in advance.

It is also worth noting that the CASP license is Circle’s second key license obtained in the EU. Before this, Circle had registered as an electronic money institution with the French prudential regulator, responsible for issuing stablecoins. EMI handles issuance, while CASP covers custody and transfers. Together, the two licenses form a complete closed loop, making Circle the only issuer among the global top ten stablecoins by market cap that has both USDC and EURC compliant with MiCA requirements.

How do dual licenses and the passport mechanism establish compliance competition barriers in Europe?

What is the substantive significance of Circle’s EMI + CASP dual-license architecture? If we split a stablecoin issuer’s compliance capability in Europe into “issuance rights” and “service rights,” the former determines whether it can issue stablecoins compliantly, and the latter determines whether it can handle user-asset custody and transfers compliantly. Having only one without the other breaks the business chain.

The completion of Circle’s dual-license architecture means its business processes for the European market have gained end-to-end recognition from the EU regulatory system. Under MiCA, a crypto asset service provider authorized in any member state can provide services to other EU member states through the “passport mechanism,” without having to reapply. This means that after the authorization decision from the French AMF takes effect, UK clearing bank ClearBank has recently also obtained Dutch MiCA approval and announced plans to provide Circle-related USDC and EURC services. Traditional financial institutions are entering Europe’s digital financial market through compliant stablecoins.

From the perspective of the industry as a whole, as of February 2026, more than 40 crypto asset service providers have obtained full MiCA authorization across EU member states, with the highest number of approvals in the Netherlands, Germany, and Malta. However, there are very few issuers that hold both EMI and CASP licenses and issue compliant stablecoins. As the July deadline approaches, stablecoin issuers that have not obtained licenses will face being excluded from the EU market, while Circle has already completed its compliance positioning in advance.

What changes are happening in the market competitive landscape between USDC and USDT?

Changes in compliance capability are rewriting the power structure of the stablecoin market. As of May 10, 2026, the total global stablecoin market cap was approximately $32.2 billion. USDT remains in the first position with about $189.6 billion in circulation, representing a market share of roughly 58.9%. USDC ranks second with about $78.96 billion in circulation and roughly 24.33% market share. In terms of market cap, USDT still leads.

But in terms of trading volume, a significant structural change has emerged. Research from Mizuho Securities shows that from early 2026 to May, USDC’s adjusted on-chain trading volume reached about $2.2 trillion, while USDT’s was about $1.3 trillion. USDC accounted for approximately 64% of the combined trading volume—this is the first time since 2019 that USDC has surpassed USDT on this key metric.

This “divergence between market cap and trading volume” has three implications. First, USDC has a higher on-chain usage frequency; it is used more for payment and transfer scenarios rather than only as a store-of-value tool. Second, the adoption of compliant stablecoins in institutional-level payment settlement is accelerating. Third, the regulatory framework is pushing funds to migrate from channels with insufficient compliance to fully compliant channels. Whether this structural change can be sustained depends on how quickly compliant stablecoins penetrate cross-border payments and corporate treasury markets.

Why has Q1 earnings become a key yardstick for measuring the effectiveness of compliance strategy?

Circle will release its Q1 earnings before the U.S. stock market opens on May 11, 2026. According to expectations from multiple research institutions, analysts expect Q1 revenue of approximately $715 million, up 23.5% year over year from $579 million in Q1 2025, but with a modest quarter-over-quarter decline from $770 million in Q4 2025. GAAP earnings per share are expected to be about $0.18, with adjusted earnings per share of about $0.27.

Notably, Q4 performance exceeded market expectations by about 23%. Revenue increased 77% year over year to $770.2 million, mainly driven by the continued expansion of USDC circulation—USDC’s circulation rose 72% year over year to $75.3 billion, setting a record high. This indicates that the expansion speed of USDC’s scale has significantly outpaced the stablecoin industry’s average growth rate over the past two years.

Investors’ attention on this Q1 earnings report may focus on three dimensions. First, whether compliance-driven growth can translate into sustained increases in USDC circulation—within the first week of May, USDC has already absorbed about $1.61 billion in net inflows. Second, the impact of changes in reserve earnings under the interest-rate environment on the revenue structure. Third, management’s updates on the AI transformation following the CLARITY Act compromise and the expansion of USDC application scenarios.

The stock price is up about 40% since the start of the year—what is the market pricing in?

Circle went public via SPAC in June 2025 at a price of about $31 per share. Since then, the stock has experienced extreme volatility: it surged to around $299 within two weeks, then fell back into a range of about $50 due to the combined effects of macro interest-rate changes and regulatory uncertainty, with a decline of more than 80%.

From early 2026 to date, the stock price has risen cumulatively by about 40%, trading recently in the range of about $111 to $119. Compared with the low point of about $50 in early February, this represents a doubling. The company’s valuation is approximately $23 billion to $30 billion.

This rally has been driven by several catalysts across different layers. First, the compromise on the CLARITY Act was reached in early May. The core dispute in the stablecoin reward mechanism—“passive income prohibition, but active usage reward retention”—was resolved, and Circle’s stock jumped nearly 20% on the day. Second, the Senate Banking Committee is scheduled to hold an initial vote on May 14 on the bill, and higher certainty reduces the regulatory risk premium. In addition, data showing USDC circulation surpassing a historical high and trading volume overtaking USDT has continued to validate the compliance narrative.

There are significant differences among different brokerages regarding Circle’s target price. Wells Fargo raised its target to $142, Rosenblatt maintained a $240 target, while Compass Point downgraded it to “sell,” warning that as USDC supply shifts into lower-margin areas, gross margin in the first quarter of 2026 is shrinking. This divergence itself reflects the market’s deeper uncertainty about Circle’s valuation logic—the market is weighing the certainty premium brought by compliance against the growth ceiling of non-interest income.

How U.S. legislative breakthroughs complete the last piece in dual-track compliance

The progress of the CLARITY Act allows Circle to build two compliance main lines in the U.S. and the EU that move in coordination. The bill is expected to undergo an administrative meeting vote by the Senate Banking Committee on May 14. If it is approved at the committee level, it will then enter the full Senate review process. The Senate must complete the legislative process by the end of 2026 in order for it to be submitted for the President’s signature.

The core compromise of the bill is as follows: it prohibits crypto companies from paying interest-like yield on idle stablecoin deposits that are held passively, but allows rewards based on usage behaviors—such as incentives related to trading, payments, and transfers. This boundary both avoids direct competition between stablecoin holding functions and commercial bank deposits, while preserving room for economic incentives in real stablecoin usage scenarios. As the stablecoin rewards issue is resolved, the bill’s provisions on token classification, decentralized finance (DeFi) regulation, and asset tokenization are also being rapidly advanced, and the final text is expected to be finalized soon.

For the U.S., stablecoin issuers’ compliance framework has entered a substantive construction stage. The GENIUS Act was signed into law by the President in July 2025, requiring that payment stablecoins maintain 1:1 full reserves and be linked to the U.S. dollar or short-term U.S. Treasury securities. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control also released proposed rules in April 2026 regarding proposed financial crime compliance plans for issuers of payment stablecoins, signaling that U.S. stablecoin regulation has moved from the legislative framework into a phase of detailed rulemaking.

Summary

The stablecoin industry is undergoing a paradigm shift from private issuance to governance by publicly listed companies. Using Circle as an example, it can be seen that the full enforcement of EU MiCA and the advancement of the U.S. legislative tracks GENIUS + CLARITY are pushing stablecoin issuers’ competitive logic from simple scale competition toward a comprehensive contest of compliance capability, public-company governance, and global regulatory adaptability.

From a short-term perspective, Q1 earnings will be the first public data point to determine whether compliance-driven USDC expansion can offset the compression of interest-rate cycles and changes in profit structure. From a long-term perspective, whether Circle’s compliance moat can sustain its first-mover advantage amid new stablecoin issuers continually entering the market and regulatory frameworks continuing to evolve still depends on the substantive expansion of application scenarios—such as the penetration of non-trading use cases including AI agent payments, corporate treasury management, and cross-border settlement. These will be the core variables in the next phase of valuation reconfiguration.

Frequently Asked Questions (FAQ)

Q1: What is the difference between the MiCA CASP license Circle received and the prior EMI electronic money license?

The EMI license is responsible for stablecoin issuance, addressing the question of whether USDC can be issued compliantly in Europe. The CASP license is responsible for stablecoin custody and transfers, addressing whether USDC asset custody and transfer services can be provided to European clients. Together, they form a complete compliance framework from the issuance end to the operating end. Circle is currently the only stablecoin issuer that has obtained both of these qualifications for USDC and EURC.

Q2: What does USDC’s trading volume surpassing USDT imply for the compliance narrative?

Based on data as of May 2026, USDC’s adjusted trading volume is about $2.2 trillion, while USDT’s is about $1.3 trillion. This means that although USDC’s market capitalization is lower than USDT’s, its on-chain unit circulation turnover frequency is higher, with more usage in real payment and transfer scenarios rather than only as a store-of-value tool. Mizuho Securities believes this reflects that institutional users’ preference for compliant stablecoins is translating into trading activity.

Q3: How does the compromise under the CLARITY Act affect Circle’s business model?

The compromise allows rewards based on usage behaviors, such as incentives related to trading, payments, and transfers, but prohibits paying interest-like yield on passively held idle stablecoin deposits. This delineation avoids direct competition with commercial bank deposit products while preserving room for incentive mechanisms for Circle and its distribution partners’ users.

Q4: What are the main drivers behind Circle’s roughly 40% stock price increase since the start of the year?

The increase has been driven by multiple factors: the CLARITY Act compromise in early May eliminated about eight months of stablecoin regulatory uncertainty; USDC circulation broke above $75 billion to set a record high; USDC’s on-chain trading volume surpassed USDT for the first time; and the approaching MiCA compliance deadline makes Circle’s first-mover advantage even clearer. However, multiple institutions have also pointed out that the risk of gross margin compression as USDC supply shifts into lower-margin areas remains an uncertainty.

Q5: Is there always a significant discrepancy between Circle’s stock price and the growth of USDC circulation?

Q4 data shows USDC circulation grew 72% year over year, while total crypto market capitalization declined by more than 40% from its peak during the same period. This “decoupling” indicates that USDC adoption is shifting from a speculative crypto trading tool to a global payments settlement infrastructure. During the earnings call, Circle’s CEO explicitly stated that “a decoupling between Bitcoin and stablecoins” is occurring, suggesting that the market logic of stablecoins is no longer merely mirroring the cyclical volatility of the crypto market.