Same Coin. Whose Rules?
The European Union and the United States both examined stablecoins and took action. What similarities and differences did they observe?
In Part One of this series, we established what a stablecoin is — and what it is not yet. The remittance sandwich works. But retail payments are still mostly theoretical, liquidity is fragmented across chains, and the word “stable” covers instruments with very different risk profiles.
Regulators noticed. And in the span of roughly two years, two of the world’s most significant financial jurisdictions produced comprehensive stablecoin frameworks. The European Union moved first, with MiCA1 entering into force in June 2023 and stablecoin rules applying from June 2024. The United States followed, with the GENIUS Act2 signed into law in July 2025.
Both frameworks are comprehensive. But they begin from different assumptions.
Europe drew a map
MiCA does not use the word “stablecoin.” That is not an oversight. It is a signal. The EU looked at the landscape and decided that “stablecoin” was too imprecise a label — that what matters is the underlying architecture, not the marketing name. So MiCA built a taxonomy instead.
Two categories matter most for what we typically call stablecoins. The first is the Electronic Money Token, or EMT — a crypto asset that stabilizes its value by referencing a single official fiat currency, like the dollar or the euro. Think USDC, think EURC. These can only be issued by credit institutions or licensed electronic money institutions. Holders have the right to redeem at face value at any time. Monthly attestations are required. The peg is backed by law, not just by promise.
The second is the Asset-Referenced Token, or ART — a crypto asset that references a basket of assets, which could include multiple currencies, commodities, or other crypto assets. ARTs face a more complex authorization process, reinforced governance requirements, and strict capital obligations. MiCA also restricts ARTs and EMTs that reference non-EU currencies from becoming too widely used — an explicit protection of EU monetary sovereignty.6
MiCA also captures a broader range of crypto-assets, while leaving difficult edge cases around decentralized structures and algorithmic models. MiCA does not explicitly ban algorithmic stablecoins. But the reserve and redemption requirements make purely uncollateralized models difficult to sustain within the framework.
The EU’s approach is broad by intention. It says: this ecosystem exists in its full complexity. We are going to regulate the whole animal.
Europe asked what stablecoins are. America asked what they are allowed to do.
America drew a lane
The GENIUS Act takes a different view. It focuses on a single regulated category: the payment stablecoin. The statutory definition is precise — a digital asset designed to be used as a means of payment or settlement, where the issuer is obligated to redeem it for a fixed amount of monetary value. That is the entire regulated category. Asset-referenced tokens, commodity-backed tokens, decentralized stablecoins, algorithmic stablecoins — none of them are recognized.
The reserve requirements for payment stablecoins are strict. Issuers must maintain one-to-one backing with high-quality liquid assets — US coins and currency, Fed account balances, Treasury bills with a remaining maturity of 93 days or less, or government money market funds. Monthly reserve disclosures are mandatory, signed off by the CEO and CFO, and examined by a registered public accounting firm.
The GENIUS Act’s narrowness is deliberate. It is a philosophical position: we will regulate what stablecoins are used for, not what they are.
The yield question — and what it reveals
Both frameworks share one striking prohibition: no issuer may pay yield to stablecoin holders.
The GENIUS Act is explicit. Section 4(11) states that no permitted issuer shall pay the holder of any payment stablecoin any form of interest or yield — whether in cash, tokens, or any other consideration — solely in connection with holding the stablecoin.12 A stablecoin that pays yield competes with bank deposits and money market funds. Congress drew that line with notable clarity.
What is less widely known is that MiCA takes the same position. Article 22(4) prohibits ART issuers from granting interest or any other benefit related to the length of time a holder holds the token. EMTs face the same restriction. Two frameworks, built on different continents, with different philosophies about what stablecoins are — and both arrived at the same answer on yield: no.
But the deeper point is this: the yield prohibition is not just a rule. It is a definitional statement. Both the EU and the US have decided, deliberately, that stablecoins are not deposits. They do not earn. They do not store value the way a savings account does.
The reciprocity problem
Here is where the divergence stops being philosophical and starts being operational.
The GENIUS Act includes a reciprocity mechanism. Foreign stablecoin issuers can access US markets if their home jurisdiction has a regulatory regime that the US Treasury determines is “comparable” to the GENIUS Act. On paper, this is sensible. In practice, it is complicated.
A MiCA-licensed ART issuer — fully compliant under EU law, authorized by a national regulator, meeting stringent reserve and governance requirements — does not fit neatly into the GENIUS Act’s definition of a payment stablecoin. Its collateral is a basket, not a fixed monetary value. Its redemption mechanics differ. Under the GENIUS Act’s framework, it may not qualify at all.
Two serious regulatory efforts, both well-intentioned, built without a common language.
When deposits were first regulated, did every country agree on what a deposit was?
References
1. Regulation (EU) 2023/1114 — MiCA. Entered into force June 2023; stablecoin provisions applicable from June 30, 2024.
2. Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), S.1582, signed into law July 18, 2025.