As the global financial system continues to adapt to the digital age, stablecoins—cryptocurrencies pegged to traditional currencies like the U.S. dollar or the euro—are emerging as a flashpoint in regulatory policy. The recent passage of the U.S. Genius Act marks a significant moment for digital finance, establishing the first comprehensive federal framework for stablecoin issuers in the United States. But while Washington moves decisively toward integrating stablecoins into its financial architecture, Europe’s response remains more cautious, guided by the Markets in Crypto-Assets Regulation (MiCA) and a heavier focus on risk mitigation.
In a conversation between Alexander Bechtel and transatlantic legal expert Anja von Rosenstiel, a licensed attorney in both Germany and the U.S., the contrasts between these two regimes were laid bare. At the heart of their discussion was not only the legislative content of the Genius Act but also the philosophical divergence between the U.S. and EU in regulating a new class of digital money.
A Strategic Shift in Washington
The Genius Act—short for Guiding and Establishing National Innovation for Stablecoins—was passed with surprising bipartisan support, signaling a rare moment of consensus in an otherwise fractured political landscape. Signed into law by former President Donald Trump, the act is widely seen as a cornerstone for broader U.S. crypto legislation, alongside the Clarity Act and the Anti-CBDC Surveillance Act. While the latter two are still making their way through the Senate, Genius has already entered into force.
Crucially, the Genius Act limits its scope to payment stablecoin issuers, preserving the U.S. dual banking system and placing minimal constraints on secondary market transactions. Issuers may operate under state or federal licenses, and the regulatory framework notably allows for non-bank entities—including certain closely held companies—to issue stablecoins, provided they meet supervisory requirements. Publicly traded companies, particularly Big Tech firms, are largely excluded unless granted special approval by a newly established Stablecoin Review Committee.
The U.S. approach is marked by openness to foreign issuers. Under Genius, a non-U.S. stablecoin issuer may register with U.S. authorities and, unless explicitly rejected within 30 days, is deemed approved. This provision signals a form of global passporting and underscores Washington’s strategic ambition to dominate the stablecoin sector by inviting innovation across borders.
MiCA’s Complex Conservatism
In contrast, Europe’s MiCA framework, though earlier to arrive, reflects a more restrictive and technocratic stance. Issuers of so-called e-money tokens (EMTs) must be either credit institutions or electronic money institutions licensed within the EU. Foreign issuers are effectively excluded unless they fully localize operations—a significant barrier to market entry.
MiCA imposes stringent requirements: EMT issuers must maintain one-to-one reserves, with at least 60% held in bank deposits. This reflects a strong emphasis on liquidity risk, particularly in the case of redemptions during financial stress. But as von Roestel noted, this approach may introduce counterparty risk, since deposits are inherently less secure than sovereign debt. By contrast, Genius permits reserve assets to include U.S. Treasury securities, considered safer in crisis scenarios.
Moreover, capital requirements under MiCA are burdensome. Significant EMT issuers must hold own funds equal to up to 3% of the total amount of issued stablecoins, eroding potential profit margins and increasing barriers to entry. The Genius Act does not impose such capital requirements beyond what is already mandated for traditional banks.
Another major divergence lies in redemption rights. MiCA guarantees users the legal right to redeem stablecoins at par, at any time. The Genius Act, by contrast, only requires issuers to publish a redemption policy and fee schedule—without ensuring direct access for retail users. While this creates a friendlier environment for issuers, it also places more responsibility on intermediaries like exchanges.
Competing Visions of Monetary Sovereignty
Perhaps most telling is how the two jurisdictions frame the strategic role of stablecoins. The U.S., already commanding 99% of the global stablecoin market in dollar-denominated tokens, sees the asset class as a geopolitical tool. Its legislation implicitly encourages further global adoption of the dollar. There are no caps on transaction volume for foreign users, and no restrictions on issuing non-USD stablecoins from within the U.S.
The EU, on the other hand, views stablecoins with greater suspicion. The European Central Bank (ECB), pushing forward with its digital euro project, sees U.S. dollar stablecoins as a challenge to monetary sovereignty. ECB board member Piero Cipollone has framed stablecoins as a potential source of systemic risk, advocating instead for a central bank–issued digital currency—expected no earlier than 2029.
This defensive posture risks sidelining the private sector, despite stablecoins’ growing utility in cross-border paymentsand decentralized finance. Von Roestel warned that Europe’s regulatory burden could push major issuers to exit the market or limit their offerings to avoid multi-jurisdictional complexity.
A Call for Recalibration
While MiCA offers strong consumer protections and financial stability measures, its rigidity may be counterproductive. As Gross argued, one of the most impactful steps the ECB could take would be to act as lender of last resort for stablecoin issuers—mirroring its role with banks. This would enhance liquidity without compromising regulatory prudence.
Such a move could also balance MiCA’s more demanding features: mandatory third-party custodianship, strict reserve asset composition, and globally applicable redemption obligations. In the U.S., meanwhile, forthcoming amendments via the Clarity Act may add further complexity, including audit and disclosure obligations for larger issuers.
As stablecoins become more embedded in global financial infrastructure, both sides of the Atlantic are refining their rules. Yet their choices reveal more than policy preferences—they reflect competing visions of the future of money itself. Where the U.S. sees strategic advantage, the EU sees systemic risk. Whether these approaches can be reconciled—or whether the market will render its own verdict—remains to be seen.
Article on Genius vs MiCAR in FAZ
English version of the article on Genius vs MiCAR in FAZ
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