The European Banking Authority (EBA) NYDFS stablecoin MOU, signed this week, covers considerably more ground than the headline information-sharing categories suggest, extending to reserve asset composition, authorisation modifications, risk analyses, compliance assessments, and planned expansion of activities.
The New York State Department of Financial Services (NYDFS) and the EBA formalised the agreement under the EBA’s duties flowing from the Markets in Crypto-Assets (MiCA) Regulation. The MOU covers stablecoins issued in both New York State and the European Union, including by entities directly supervised by the EBA under MiCA.
The legal hook is Article 126 of MiCA, which authorises the EBA to conclude administrative agreements with supervisory authorities in third countries to carry out its responsibilities under Article 117. That gives the arrangement a clear statutory anchor on the EU side, even though the MOU itself is not legally binding.
What the EBA NYDFS Stablecoin MOU Actually Covers
Beyond the commonly cited data points, circulating supply, holder counts, and audit results, Orrick InfoBytes summarised the MOU as also covering reserve asset composition and compliance assessments. The two regulators can participate in on-site inspections and investigations in each other’s jurisdiction, and are required to notify each other of material infringements by supervised entities.
The crisis coordination clause deserves attention. The MOU provides a framework for the regulators to assist each other during emergencies, which matters for any stablecoin with significant cross-border circulation if a depeg or liquidity event hits one jurisdiction first.
One constraint worth flagging: only the stablecoin-related activities of supervised entities fall within scope. If a firm operates outside both regimes, or conducts non-stablecoin activity under the same corporate umbrella, those activities are not caught by this arrangement.
New York’s Existing Framework and What the EBA Brings
NYDFS already runs one of the tighter stablecoin regimes globally. Regulated issuers in New York are subject to strong reserve requirements, confidence in redeemability, transparency obligations, and a hard prohibition on rehypothecation of reserve assets. That no-rehypothecation rule, in particular, is a structural constraint that distinguishes NYDFS-approved stablecoins from some offshore issuers.
The EBA’s counterpart authority under MiCA targets e-money tokens and asset-referenced tokens. By linking the two regimes through this MOU, the arrangement creates at least a coordination layer across what are, in practice, the two most consequential regulatory jurisdictions for stablecoin issuers operating at scale.
The global stablecoin market stood at more than $319 billion as of this week, according to DefiLlama. US dollar-denominated supply dominates, with Tether’s USDT and Circle’s USDC the two largest by market cap. Both issuers operate across multiple jurisdictions, making cross-border supervisory coordination directly relevant to how their reserve and compliance data gets shared between regulators.
Jimmy Xue, co-founder of quantitative yield protocol Axis, told Cointelegraph in January that the market had largely plateaued after rapid expansion, entering a consolidation phase as new regulation, liquidity constraints, and higher real-world yields weighed on new issuance. Competitive Treasury yields, he added, further reduced appetite for rapid growth. The MOU lands in that context: regulators are tightening coordination at the same moment organic issuance momentum has stalled.
Banks and major financial institutions on both sides of the Atlantic have been piloting stablecoins for payments, accelerated by the US GENIUS Act signed into law in July and MiCA’s entry into force toward the end of 2024. Institutional use cases are precisely where cross-border reserve visibility and coordinated supervision matter most, given the counterparty and settlement exposure involved.
The MOU’s on-site inspection provisions are the sharper edge here. Global Relay Intelligence noted the arrangement creates a blueprint for cross-border coordination, though without legal binding force. Whether regulators actually exercise those inspection rights, and how quickly material infringement notifications travel between New York and Brussels, will determine whether this is a working supervisory tool or a framework document that sits in a drawer.
Watch for the first instance of a cross-border notification under the material infringement clause: that will be the test of whether the EBA NYDFS stablecoin MOU functions operationally or remains a statement of intent.
