Stablecoin Regulation Transformed with US GENIUS Act and EU MiCA
- The GENIUS Act in the US and EU’s MiCA bring comprehensive stablecoin regulations.
- Central banks highlight potential risks with recent innovations.
- Regulatory shifts could greatly expand stablecoin markets globally.
President Trump signed the GENIUS Act on July 18, 2025, implementing significant stablecoin regulation in the US amidst heightened legislative and regulatory scrutiny.
The legislation marks a pivotal shift, influencing global stablecoin use, corporate integration, and regulatory frameworks, with potential financial market and cryptocurrency impacts.
The United States passed the GENIUS Act on July 18, 2025, and the European Union introduced MiCA regulations, transforming stablecoin oversight.
With new regulations, stablecoin integration grows as central banks warn of potential systemic risks.
US and EU Standardize Stablecoin Regulations in 2025
President Trump signed the GENIUS Act on July 18, 2025, shaping stablecoin regulations in the US. In the EU, MiCA was enacted, standardizing digital finance practices across Europe.
Chief advocates in the US include Senator Elizabeth Warren and Representative Brad Sherman, both expressing concerns over stablecoin risks. These initiatives aim to secure financial integrity and compliance.
Central Banks Warn of Innovation-Driven Risks
The GENIUS Act and MiCA regulations drew reactions, with central banks warning of innovations accompanying risks. Institutional players predict sharp growth in stablecoin adoption.
Economist Daniel Lacalle commented on how regulations could shift global payment structures. Financial markets are poised for increased corporate involvement and adoption rates.
Full Reserves Mandates to Prevent Stablecoin Failures
Historically, social instability and loss followed undercollateralized stablecoin failures like Terra/LUNA. Current measures aim to mitigate similar incidents by mandating full reserves.
Stablecoin sectors might expand exponentially to $2 trillion by 2028, driven by regulatory clarity. Historical trends underscore a push for secure, stable digital financial systems.
“The advent of stablecoins comes with a stark warning. … Many stablecoins have seen substantial deviations from par, highlighting the ‘fragility of their peg’. … Emerging regulatory divergence is worrying.” — ECB, Blog, 28 July 2025, source
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