The Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act) was signed into law in the United States (the US) on 18th July 2025.
This is a landmark in US cryptocurrency (crypto) legislation because it is the first major US legislation relating to crypto, specifically stablecoins. On the other hand, the European Union (EU) implemented the European Union's Markets in Crypto-Assets Regulation (MiCA) that came into force as of the 30th of December 2024. MiCA stands as a far-reaching EU level law aimed at crypto assets in general, including the regulation of stablecoins. Both laws officially aim at creating an environment that plants innovation and market growth with a high presence of financial soundness and safeguarding investors. That aside, both legislations fundamentally differ in approach, scope, means and requirements for regulation.
Scope and Applicability of the Regimes
The GENIUS Act focuses exclusively on payment stablecoins which are defined as digital assets that are, or are designed to be used as, a means of payment and are issued by someone who promises to redeem or buy them back at a fixed price and claims or leads people to reasonably expect that their value will remain stable compared to that currency, such as digital tokens intended as a means of payment with a stable value relative to a fiat currency. The scope of the GENIUS Act is tailored to regulate the issuance of stablecoins in the US and prohibits the issuance of a payment stablecoin in US territory, unless it is from an approved payment stablecoin issuer. Stable value tokens that already fall under the scope of securities or other financial products issued by registered investment companies remain outside of the application of the GENIUS Act.
On the other hand, MiCA has a wider scope, applying to virtually all cryptographically secured digital assets that are not already covered by traditional financial regulations. MiCA expressly excludes non-fungible tokens (NFTs) and crypto assets that meet the criteria of financial instruments, deposits or e-money. MiCA's reach effectively covers utility tokens, payment tokens and stablecoins, and covers any crypto asset issuance to the public or admission for trading in the EU as well as any service related to the provision of crypto-related assets within the EU. Whilst certain public entities, such as central banks, fall outside the scope of MiCA, private issuers and intermediaries fall into MiCA's applicability if they are operating within the EU. One of the main rationales behind MiCA is to prevent forum shopping and to ensure investor protection across the EU.
Obligations and Protections for Stablecoin Issuers
Reserve Banking
The GENIUS Act requires full reserve backing for all payment stablecoins that are issued within the US. Every permitted stablecoin issuer must maintain reserves equivalent to a minimum 100% of their outstanding stablecoin supply at all times. The GENIUS Act explicitly lists reserve assets that it deems permissible such as the US dollar and Federal Reserve notes and allows for short-term repurchase agreements collateralised by Treasuries, amongst other reserve assets. Risky investment of reserve assets is largely prohibited, and issuers face an almost blanket ban from pledging or reusing stablecoin reserves to take on leverage. Essentially, the GENIUS Act treats stablecoins in a similar manner to bank deposits to prevent the collapse of the stablecoin. Meanwhile, MiCA offers a somewhat more holistic approach to stablecoins, and is not limited to one currency backed stablecoins. Issuers of asset-referenced tokens (ARTs) are obliged to keep a stable and uninterrupted reserve of assets backing their tokens. The reserve must have a value that is at least equal to the outstanding token liabilities. MiCA requires that a significant portion of reserve assets for ARTs be held in secure and low-risk instruments. E-money tokens (EMTs) are obliged to be fully backed by funds of the same currency.
Redemption Rights
The GENIUS Act invites issuers to maintain clearly outlined and fair redemption policies and procedures in place for redeeming stablecoins on schedule. Issuers must publish their terms of redemption publicly and must redeem immediately on request. Likewise, MiCA also gives emphasis to redemption rights by giving holders of EMTs the right to redeem their stablecoin at par value at any time. Similarly, MiCA requires ARTs to have a whitepaper and terms enabling holders to have permanent redemption rights to holders. Moreover, MiCA grants regulators the authority to intervene in the event of a default by an issuer on redemption.
Regulation of Service Providers and Market Infrastructure
Contrary to the GENIUS Act, which focuses on stablecoin issuance, MiCA introduces a broader framework that encompasses a wider range of the crypto environment. MiCA introduces a licensing regime for crypto-asset service providers (CASPs). These providers have to obtain a license from a national competent authority within the EU and adhere to strict requirements on governance, capital, client asset segregation, and conduct of business. Once a licence is obtained, the licensed entity may passport their services across the EU. The GENIUS Act diametrically opposes this approach by leaving crypto CASPs largely outside its scope and instead relying on individual State laws and oversight from entities such as the SEC to provide clarity as to how a token should be classified.
Licensing and Supervision Frameworks
Whilst both legal regimes provide formal approval processes for licensing, they vary significantly in structure. Under the GENIUS Act, issuers of stablecoins must either be a federally regulated bank or subsidiary, a newly chartered nonbank entity approved at the federal level, or a state-licensed issuer that complies with uniform federal standards. The responsibilities of oversight are split amongst several federal regulators, such as the OCC, and FDIC, depending on the nature of the issuer, with state regulators playing a key role for entities licensed at state level. In contrast, MiCA assigns licensing and oversight to one national authority in each Member State, with the European Central Bank acting as a tool to be consulted where a stablecoin may have implications on monetary policy or financial stability. MiCA creates a more unified structure with further guidance provided at EU level by different authorities, such as the European Banking Authority.
Enforcement and Penalties
Both legislations empower regulators to punish infringements. The GENIUS Act allows US regulators to impose civil penalties of up to $100,000 for each day of material breach and criminal penalties for wilful misconduct. In a similar fashion, MiCA authorises that Member States impose effective sanctions including multi-million-euro fines based on the turnover of the entity. Furthermore, regulators are empowered to revoke licences and prohibit individuals from engaging in crypto-related activities. A significant difference in enforcement between the two legislations is that MiCA directly addresses market abuse whereas the GENIUS Act does not cover market abuse, highlighting MiCA's broader approach to investor protection and market integrity.
Cross-Border and Strategic Implications
Global crypto firms are facing increasing difficulties and challenges navigating global compliance. The GENIUS Act bans the unlawful issuance of payment stablecoins in the US without authorisation, meaning that any entity based outside the US looking to issue payment stablecoins targeting American users must first obtain a US licence or partner with an already approved entity. MiCA takes a similar approach to any crypto asset offering to those in the EU or being listed on an EU trading platform, as MiCA requires such foreign entities to register an EU entity and comply with its provisions. Compliance with multiple jurisdictions has therefore become a matter of paramount importance for entities aiming to carry out their business within both jurisdictions. Gaps between the two legislations are seen with reference to key definitions; for example under MiCA, a gold-backed token may fall within MiCA's scope as an ART, but it is not regulated under the GENIUS Act if it does not reach a fixed fiat redemption value threshold. Such gaps can greatly influence business structure and jurisdictional choices.
Innovation vs. Protection
Overall, both laws reflect a legislative shift towards increasing regulation maturity in the crypto space with the goal of achieving a balance between innovation and high investor protection. Conversely, the GENIUS Act allows for legal certainty and institutional paths for the growth of dollar-backed stablecoins, which may have positive implications for bolstering the US dollar's role as a front-runner in digital finance. Still, its tight conditions and limited scope can lead to an unevenness in the ability to innovate, overwhelmingly favouring firms with greater access to capital. One of the main plus points is definitely agility. On the other hand, MiCA takes a more comprehensive approach across the whole range of crypto assets while ensuring tight and conduct-based protection. MiCA provides a harmonised legal framework across the EU which, giving it a competitive edge while attempting to attract businesses looking for legal certainty as well as access to a large market. Despite differing approaches, each of the frameworks has the potential to reshape the world of crypto by enforcing legal compliance and investor confidence in digital assets harmoniously. The question is, is the GENIUS Act genuinely offer a more progressive and positive approach to crypto than MiCA as the press seems to be indicating? We have our doubts.
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