Regulatory Radar #3

The recent passage of the U.S. GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) has sent regulatory ripples across the Atlantic. As the U.S. takes a bold step toward stablecoin regulation, European officials are parsing its implications for the EU's digital finance strategy. This post summarizes the reactions from Brussels and other EU institutions, and what they could signal for the future of transatlantic crypto policy.

Brussels Watches Closely: Strategic Opportunity or Regulatory Risk?

Following the enactment of the GENIUS Act, which establishes a comprehensive framework for the issuance and oversight of U.S. dollar-backed stablecoins, EU officials have been quick to respond. While there’s a broad consensus that regulatory clarity is welcome, reactions across European institutions reflect a blend of strategic caution and competitive awareness.

• European Commission (EC) - Cautious Validation: EC officials welcomed the move in principle. A senior official from DG FISMA noted that the U.S. stablecoin law "reflects a long-overdue commitment to serious digital finance regulation," but cautioned that it may accelerate "regulatory arbitrage pressures in Europe."Internal Commission briefings reportedly highlighted that GENIUS "validates the core logic of MiCA" (the EU’s Markets in Crypto-Assets Regulation) by requiring reserve backing, redemption rights, and prudential oversight for stablecoins. However, there is some concern that the U.S. framework offers "greater operational flexibility" for issuers, which could attract new entrants to the American market.

• European Parliament (EP) - Split views : EP members of the Economic and Monetary Affairs (ECON) Committee were split. Some MEPs praised the GENIUS Act as an important move toward global regulatory convergence. Others, particularly from the Greens and center-left S&D groups, expressed fears that the U.S. might become "a permissive haven" for dollar-denominated stablecoins unless supervision is strictly enforced.

The GENIUS Act’s multi-issuance provisions — allowing both bank and non-bank entities to issue stablecoins under specific regulatory conditions — were noted with interest in Brussels. Some policymakers view this as a potential competitive advantage for the U.S. system, given MiCA’s more cautious approach to non-bank issuance.

The ECB Sounds the Alarm: dollarization risk

The most vocal critique came from the European Central Bank. ECB board member Piero Cipollone warned in a recent speech that the GENIUS Act could "turbocharge U.S. stablecoin issuance" and lead to "a gradual dollarization of European digital payments." He called for urgent coordination within the eurozone, saying the ECB must "not be caught off guard by a wave of dollar-linked assets outpacing the digital euro."

President Christine Lagarde echoed these concerns more diplomatically, stating that while the ECB supports responsible innovation, "the risk of monetary fragmentation is real if non-euro stablecoins dominate retail transactions in Europe."This has reignited debate over MiCA’s adequacy in ringfencing the eurozone against foreign digital currency inflows.

The Transatlantic Outlook: Divergence or Dialogue?

The passage of the GENIUS Act is already influencing how EU officials are thinking about future legislation. One tangible impact: renewed calls within the Commission to reassess MiCA’s thresholds on foreign stablecoin issuance. Some voices within the EC are urging a faster rollout of the digital euro to mitigate dependence on dollar-based tokens.

At the same time, there is cautious optimism that GENIUS might revive stalled talks around U.S.-EU cooperation on crypto supervision. European lawmakers have long pressed Washington to deliver a harmonized framework, and now that one exists for stablecoins, there may be momentum to align supervisory practices.

As one senior MEP put it: "MiCA was first. GENIUS is faster. The question now is: can we meet in the middle before market fragmentation gets worse?"

Final Take

The GENIUS Act’s passage marks a pivotal moment in the global race to regulate digital assets. For the EU, it brings both a challenge and an opportunity: to defend the integrity of its digital currency regime while leveraging this moment to deepen international cooperation. Whether the transatlantic stablecoin landscape will converge or diverge may depend as much on political will as on policy architecture.

Stay tuned for more insights in the next edition of Regulatory Radar!

‍

The Journey of the GENIUS Act: A Timeline

This timeline-driven feature traces the GENIUS Act -Guiding and Establishing National Innovation for U.S. Stablecoins Act - from its early conceptualization in February 2025 through its swift bipartisan progress in both chambers of Congress, culminating in Senate approval in just over four months. 

With final passage expected before the August 2025 recess, the focus will soon shift to implementation—anticipated throughout 2026 and 2027 via rulemaking from key federal agencies including the Federal Reserve, OCC, SEC, and FinCEN.

The GENIUS Act represents the culmination of years of debate, shaped by numerous legislative efforts aimed at stablecoin oversight.

As the U.S. accelerates its response to digital asset regulation, it stands at a pivotal moment—poised to catch up with the EU’s more mature MiCA framework.

A (not so) brief history of US stablecoin legislation

The House of Representatives and the Senate have been pro-active in formulating draft laws - or bills - to create a dedicated and comprehensive US regulatory framework for payment stablecoins. 

Since 2017, both the Republican and Democratic parties have proposed a plethora of legislation relating directly or indirectly to stablecoins, and payment stablecoins in particular. 

The first wave of legislative proposals for a regulatory framework for stablecoins date back to 2019, in reaction to the emergence of Facebook’s Diem (ex - Libra) project. However, legislative momentum really began to pick up in 2022 with a second wave of legislation that aimed to define payment stablecoins, the legal pathways to issuing payment stablecoins as well as regulatory oversight, reserve requirements, etc.

First wave of U.S. Stablecoin Regulations

Second Wave of U.S. Stablecoin Regulations

A Step-by-Step Timeline of the GENIUS Act

Stage 1: Conception and Drafting

Stage 2: Introduction and Committee Review

Stage 3: Floor Debate and Vote

Floor Debate

Senate Consideration and Bipartisan Compromise

Final Vote (Senate)

Next Steps : from House Review to Implementation

From House Review to Official Publication

Entry into Force & Implementation

Key Timing Observations: EU vs. USA

Given the breakneck speed at which the GENIUS Act has passed the Senate, despite political frictions, it is interesting to compare the regulatory trajectories of the EU’s pioneering MiCA Regulation and the U.S. GENIUS Act:

• Where do the MiCA and GENIUS Act timelines converge—if at all?
• What can expect moving forward - which imperatives are likely to shape these distinctive trajectories?

Here are some quick takeaways. 

The EU has already operationalized a leading licensing framework, placing it ahead in terms of legal certainty and supervisory action - the Market in Crypto Assets Regulation - a comprehensive digital asset framework, covering stablecoins, utility tokens, and crypto-asset service providers (CASPs). 

MiCA was introduced in September 2020 and came into full legal effect in June 2023, with stablecoin provisions applicable from June 30, 2024, and broader rules from December 30, 2024. 

MiCA took nearly 3 years from the introduction of the proposal to full applicability but this reflects: 

• the EU’s methodical regulatory sequencing, shaped by pan-European consensus-building across EU institutions and 27 EU Member States. 

• The scope of MiCA which covers all crypto-assets and crypto-asset service providers

If passed by August 2025, the GENIUS Act could be passed in only 6 to 7 months, which is by no means a small accomplishment —driven by political urgency, industry support, and a Republican led framing of the bill as a way of protecting the US dollar’s dominance (dollar-centric geopolitical strategy). 

Moving forward, stakeholders looking at US developments should monitor:

• The House reconciliation process for the GENIUS Act and its coordination with the STABLE Act. The House review could escalate the debate over scope, ethics, and Big Tech carveouts—potentially merging with broader frameworks like the CLARITY Act.
  
  
• Political frictions could  very well intensify as Trump’s personal crypto interests remain unchecked, attracting further pro-consumer amendments or opposition.
  
  
• The actual activation timeline of U.S. regulatory implementation :  the GENIUS Act will rely heavily on subsequent rulemaking by federal agencies, with effective implementation deferred up to 18 months after enactment (i.e., late 2026 or early 2027). 

• Closely linked to the previous point, the 2026 midterms may see renewed debate, shaped by campaign financing from crypto PACs and additional scrutiny over amendments (like anti-bailout measures or privacy protections).

As this series continues, we’ll unpack how these two landmark regulatory frameworks align or diverge on crucial issues such as licensing, reserve requirements, consumer protections, and oversight mechanisms.

🧭 Stay tuned for our next edition, where we will delve deeper into the MiCA-GENIUS comparison and what it means for global crypto regulation and innovation!