Regulators Align Global Rules as Stablecoins Face Bank-Like Oversight

The U.S. is moving to regulate stablecoins under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), a legislative framework that establishes clear guidelines for payment stablecoins, marking a pivotal shift in the regulatory landscape for digital assets [1]. This development aligns with a broader global trend where the European Union (EU) has already implemented the Markets in Crypto-Assets Regulation (MiCA), a comprehensive regulatory framework that applies to most crypto assets and service providers [2]. Together, these regulatory frameworks highlight a growing consensus that stablecoins, due to their increasing role in global finance, require clear guardrails to ensure stability, transparency, and consumer protection.

The GENIUS Act, introduced in 2024 and expected to take effect by early 2027, focuses exclusively on payment stablecoins—tokens designed to maintain a 1:1 peg to fiat currencies such as the U.S. dollar [1]. These stablecoins must be issued by entities that either are insured banks, credit unions, or state-regulated organizations under a $10 billion threshold. The law mandates that stablecoin reserves must be fully backed by high-quality liquid assets, including cash, insured bank deposits, short-term U.S. Treasuries, and certain money market funds [1]. Additionally, the act requires monthly public disclosures of reserves by independent auditors and mandates that stablecoin issuers adhere to AML and CFT obligations under the Bank Secrecy Act [1].

This regulatory approach places stablecoins under the same oversight as traditional financial institutions, effectively subjecting them to bank-like compliance standards. For instance, the GENIUS Act explicitly bars stablecoin issuers from offering interest or yield on stablecoin balances, prohibits insinuations of federal backing or insurance, and mandates segregation of customer assets from company reserves [1]. These requirements aim to prevent the risks that have historically plagued unstable crypto assets, such as the 2022 collapse of TerraUSD, an algorithmic stablecoin that lost its peg and caused widespread market instability [3].

Complementing the U.S. efforts, the EU’s MiCA regulation, which came into force in June 2023, covers a broader scope, regulating not just stablecoins but most crypto assets and their service providers. Under MiCA, stablecoin issuers are categorized as either e-money tokens or asset-referenced tokens and must obtain licenses from EU financial authorities [2]. These tokens must maintain full reserves in highly liquid assets and adhere to stringent consumer protection and disclosure rules. Furthermore, MiCA prohibits algorithmic stablecoins like TerraUSD, reinforcing the EU's stance against inherently volatile or opaque structures [2].

The contrast between the two frameworks is evident in their approach to oversight and compliance. While the EU emphasizes a centralized supervisory model led by agencies like the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA), the U.S. GENIUS Act blends federal oversight with a pathway for state-regulated issuers. This hybrid model allows for a more flexible regulatory environment but may complicate cross-border compliance for firms operating in both markets [1].

Industry experts have highlighted both the opportunities and challenges posed by these regulatory shifts. Markus Levin, co-founder of XYO, a crypto project previously qualified by the SEC, noted that while the GENIUS Act provides much-needed clarity for stablecoin issuers, it could also create barriers for smaller players, potentially stifling innovation and competition [1]. Meanwhile, Kadan Stadelmann, CTO of Komodo, emphasized that the MiCA framework offers a more uniform and predictable regulatory environment, which is advantageous for firms seeking to scale operations across the EU [1].

Looking ahead, the implementation of these laws will likely influence the broader regulatory evolution of the crypto sector. In the U.S., the GENIUS Act is expected to set a precedent for more comprehensive legislation addressing a wider range of digital assets. Similarly, the EU’s MiCA framework could inspire similar regulatory approaches in other regions, potentially leading to a more harmonized global standard for crypto compliance.

For firms, the path to compliance under both frameworks demands strategic planning and operational adaptability. In the EU, companies must prepare for broad-based authorization and reporting obligations, while in the U.S., the focus will be on reserve management, audit transparency, and AML compliance. As the legal landscape continues to evolve, risk managers and compliance officers must stay agile, leveraging AI-driven tools and robust governance systems to navigate the complexities of stablecoin regulation.

Source:

[1] MICA vs. GENIUS Act: How Crypto Laws Differ in Europe and the US (https://www.ccn.com/education/crypto/mica-vs-genius-act-how-crypto-laws-differ-in-europe-and-the-us/)

[2] Stablecoins and Compliance: Preparing for the New Wave of Regulation (https://www.piranirisk.com/blog/stablecoins-and-compliance-preparing-for-the-new-wave-of-regulation)

[3] MICA and the GENIUS Act: A Defining Moment for Stablecoins (https://www.spencertom.com/2025/08/15/mica-and-the-genius-act-a-defining-moment-for-stablecoins/)