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Digital Asset Accounts operates under Circle’s Direct End-User Custody model, where Circle holds custody of digital assets on behalf of end customers while distributors provide the user interface. European Economic Area (EEA) accounts follow this same model under a different regulatory and technical framework. For more information, see the EEA custody model.

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Direct end-user custody defined

In the Direct End-User Custody model, Circle holds custody of the digital assets (stablecoins) on behalf of the end customer directly. The distributor acts as a technology integrator that provides the user interface and experience but does not take custody of or control the underlying funds. This model provides several advantages:
  • Regulatory clarity: Circle, as the custodian, is responsible for compliance with applicable custody regulations
  • Reduced distributor obligations: Distributors are not required to obtain money transmitter licenses or custody licenses for the stablecoin holdings
  • End-customer protection: Funds are held by a regulated entity with robust security and compliance infrastructure

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How it works

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Beneficial ownership

Each end customer is the beneficial owner of the stablecoins held in their account. Although the assets are pooled in Circle’s custody infrastructure, the beneficial ownership is tracked at the individual account level.

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Account segregation

Digital Asset Accounts maintains logical segregation of funds at the subaccount level. Each subaccount tracks the balance for a specific end customer and currency. The underlying custody may use omnibus wallet structures (a single blockchain wallet that pools assets from multiple customers) for operational efficiency, but account records ensure that each customer’s entitlements are clearly defined and auditable.

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Distributor responsibilities

Under the Direct End-User Custody model, the distributor is responsible for:
  • Providing the user interface for their end customers to interact with their accounts
  • Onboarding end customers through the End User Onboarding API, which handles KYB data collection and document submission
  • Integrating with the Digital Asset Accounts API to enable account operations such as wire deposits and withdrawals and crypto transfers
The distributor is not responsible for:
  • Holding or controlling customer funds
  • Managing compliance or regulatory obligations related to custody
  • Performing KYB or KYC verification (Circle handles this)

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Compliance

Circle manages the following compliance obligations associated with digital asset custody:
  • KYB verification: Circle performs Know Your Business verification on all end customers before activating their accounts
  • Transaction monitoring: Circle monitors transactions for suspicious activity and compliance with applicable regulations
  • Risk management: Circle applies risk ratings and transaction limits based on the verified profile of each end customer
For more information on risk ratings and limits, see Limits and risk ratings.

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EEA custody model

Digital Asset Accounts for distributors based in the European Economic Area (EEA) follows the Direct End-User Custody model but operates under the Markets in Crypto-Assets Regulation (MiCA). For details on the EEA regulatory context, see EEA and MiCA. The following table summarizes the custody arrangements for EEA accounts under MiCA.

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Custodian

Circle France SAS holds custody of EEA accounts and is supervised by the AMF (France’s financial markets regulator).

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Segregation

EEA accounts are subject to MiCA physical segregation requirements. Rather than pooling assets in omnibus wallets, EEA subaccount balances are held in dedicated onchain reserve addresses. Circle manages this segregation using Mint SAS infrastructure. Distributors do not interact with or configure the reserve addresses directly.

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Reporting obligations

EEA accounts are included in ACPR regulatory reporting through the Mint SAS reporting pipeline. For details on the Reserve Management API used for MiCA balance reporting, see EEA API behavior. To onboard EEA customers under this model, see Onboard EEA customers.