EU–US Stablecoin Rules Split as Regulatory Models Shape Digital Money
Diverging approaches in major jurisdictions are reshaping how payment-focused digital assets, tokenized deposits and real‑world‑asset systems will scale across borders
Stablecoins are entering a decisive phase as global regulators adopt profoundly different approaches that will determine how cross‑border digital money evolves. The European Union’s Markets in Crypto‑Assets Regulation (MiCA) seeks to impose strict guardrails on issuance, asset backing, and redemption, while the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) offers a more flexible structure designed to accelerate payment‑focused innovation.
Industry leaders warn that this divergence will define where institutional issuers choose to operate and how quickly new forms of digital money achieve mainstream integration.
The competitive tension between these frameworks reflects a broader shift away from the early dominance of USD‑pegged stablecoins. Banks, payment providers, and blockchain firms are now preparing for an era where local‑currency tokens and tokenized deposits coexist alongside traditional fiat infrastructure. With trillions of dollars in annual settlement flows at stake, the emerging landscape will influence both regional monetary sovereignty and global payment efficiency.
Marian Scheele, Head of Fintech at Clifford Chance Amsterdam, said that MiCA is designed to create stability and trust for issuers and customers.
“You must have a license, you must have a reserve of assets, and you must redeem instantly if a stablecoin holder wants to redeem,” she said, arguing that this foundation is essential before widespread use cases can scale.
Bernhard Kronfellner, Head of Web3 for Europe, the Middle East and South America at Boston Consulting Group (BCG), warned that Europe’s model still leaves room for vulnerabilities.
“There is a possibility to have a not‑so‑stable stablecoin that’s completely official and regulated in Europe,” he said, pointing to the option for issuers to hold reserves in commercial banks that could fail.
Riccardo Donega, Head of DLT and Digital Assets Products at Banca Sella, emphasised that MiCA gives regulators the power to prevent non‑euro stablecoins from dominating the region. This, he argued, ensures a level playing field for domestic issuers.
Regulatory Competition
The panel discussion, titled Stablecoins: The Quiet Revolution in Global Finance, was moderated by Kene Ezeji-Okoye, Executive in Residence at Global Digital Finance, and held at the London Blockchain Conference in London on October 22.
Scheele explained the regulatory split in direct terms, saying the GENIUS Act “focuses on stablecoins used for payment purposes only,” while MiCA introduces broader requirements for all asset‑referenced tokens. This functional difference leads to different commercial incentives.
In the US, a more flexible reserve structure—supported by higher‑yielding Treasury assets—creates advantages for USD‑focused issuers. In Europe, the safeguard‑heavy structure requires issuers to hold a larger proportion of their collateral with commercial banks.
Kronfellner argued that these discrepancies will determine where issuers choose to operate, saying his clients increasingly view regulation as a competitive factor rather than a constraint. He noted that banks are re‑entering the digital‑asset sector, reversing earlier reluctance.
He noted that banks are re‑entering the digital‑asset sector, reversing earlier reluctance and now representing a significant share of his firm’s client base.
Donega added that national governments will act to preserve monetary sovereignty. He cited a proposal in Italy offering tax advantages for euro‑based stablecoins as an example of how policymakers may influence adoption trends.
Local‑Currency Momentum
Panelists broadly agreed that the global reliance on USD‑backed stablecoins presents risks for smaller jurisdictions, with Scheele noting that “there’s a huge dominance of US‑dollar‑pegged stablecoins,” which she said is driving Europe to accelerate domestic alternatives.
As Scheele explained, businesses and consumers benefit when they can transact and settle using tokens linked to their domestic currency, avoiding costly FX conversions.
Donega said that once regulated banks begin issuing local‑currency stablecoins, new volumes will follow. “If banks around the world start to offer local‑currency stablecoins, the volume will be boosted by the bank offering.”
He added that millions of new wallets have appeared over the past two years, signalling real retail‑level adoption.
Luke Dufour, Compliance Advisor for EMEA at TRM Labs, said increasing on‑chain spend will also surface illicit‑finance patterns currently obscured in cash‑based activity.
“Having local stablecoins that facilitate spending on normal goods and services every day will give us more visibility so we can detect more illicit activity,” he said.
Real-World Asset Tokenization
The panel highlighted that real-world asset (RWA) tokenization is accelerating the need for interoperable digital cash.
Scheele described tokenization as a catalyst, noting, “If tokenized assets are paid for by stablecoins, that will grow the market enormously.” She referenced commitments from major asset managers to tokenize exchange‑traded funds, which would require reliable settlement‑grade stablecoins at scale.
She also noted that some analysts expect tokenized bank deposits—digital versions of traditional deposits—to grow larger than stablecoins, driven by institutional trust and clearer regulatory oversight.
Kronfellner said that clients are now building long‑term strategies blending stablecoins, tokenized deposits, and tokenized assets.
“Banks are not doing pilots for the sake of doing a pilot,” he said. “They are doing it to scale up stablecoins.”
Donega added that stablecoins will remain essential even in future tokenized‑deposit environments. He said their utility becomes clear when enterprises need token‑to‑token settlement rails to match tokenized assets with tokenized money.
Institutional Deployment
Dufour explained that the biggest barrier to institutional adoption is not technology but internal risk perception.
“Banks spend a lot of time trying to understand their existing exposure,” he said, adding that this process often reveals new commercial opportunities.
He observed that banks are already using infrastructure‑as‑a‑service platforms to issue digital assets without bearing the entire operational load.
“There is no external blocker to this adoption,” he said. “The runway is there for those who want to take it.”
Kronfellner advised that institutions must focus on user experience and sustainable cost structures. He argued that customers should not need to know whether stablecoins operate in the background.
“Clients won’t even recognize that it’s a stablecoin on the backend,” he said.
Panelists agreed that widespread enterprise use will accelerate in 2026 and 2027 as banks recognise that digital‑asset rails reduce operational costs and open new revenue channels.
Dufour highlighted that stablecoins now account for about 30% of all on‑chain activity and said this surge is reshaping compliance expectations.
“It’s almost impossible to avoid stories about stablecoins,” he said. “We’re now seeing stablecoins account for around 30% of on‑chain activity in total.”
He said global banks are mapping their exposure to digital‑asset flows to identify both commercial opportunities and financial‑crime vulnerabilities.
Scheele noted that early crypto exchanges suffered large fines because they expanded globally without aligning with local standards. She said issuers must now determine where they operate based on regulatory obligations and long‑term market potential, arguing that firms have learned costly lessons.
“They started offering services all over the globe, and then you saw what was happening—they got huge fines or were prohibited altogether,” she added.
As decentralized‑finance mechanisms mature, traditional banks are reassessing their place in this ecosystem. Donega said banks will still be essential as gateways for regulated custody, identity verification and safe access to DeFi protocols. He also highlighted digital identity as a future bank‑led service required for secure, large‑scale interaction.
Kronfellner said banks could either build their own DeFi platforms or take equity stakes in emerging protocols. He compared this to how travel agencies might have invested in early online‑booking platforms.
“It is happening anyway,” he said. “As a bank, you can buy into a platform or launch a platform yourself.”
Looking to 2030, panelists expect stablecoins—both institutional and consumer‑facing—to become integrated into everyday financial behavior.