In July, the United States enacted the Guiding and Establishing National Innovation for US Stablecoins Act (the GENIUS Act). From now on, only institutions that qualify as Permitted Payment Stablecoin Issuers may offer dollar-pegged stablecoins to the public. To qualify, an entity must be domiciled in the United States and either receive a federal charter from the Office of the Comptroller of the Currency, operate under an approved state regime if its circulation stays below ten billion US dollars, or issue through a separately capitalized insured depository institution.
Each coin must be backed one-for-one with cash or short-term US Treasury bills (T-bills) that sit in a segregated reserve account, and the issuer must publish a concise attestation of those reserves every month. Holders cannot earn interest simply by holding the token, but they do enjoy a senior right to the underlying assets in the event of insolvency. The statute also requires issuers to maintain the technical ability to freeze or destroy tokens flagged by law enforcement.
A stablecoin is a form of digital cryptocurrency that mirrors, or “pegs”, the value of a specific commodity (for example, gold) or a fiat currency (for example, USD, EUR, CHF, etc) to achieve a stable price on the highly volatile crypto market. Apart from mirroring the value of a particular commodity or a fiat currency, a stable price can be achieved by regulating the supply amount of the stable coin relative to its demand, through an algorithm, to always have a price in equilibrium. Because each token can be moved across blockchains in seconds while staying pegged to its reference currency, popular coins like USDT or USDC have become the preferred working capital of the crypto economy and a bridge between traditional banking and decentralized finance.
The most popular stablecoin in the cryptocurrency market is Tether, commonly referred to by its coded name USDT. This stablecoin is pegged directly to the US Dollar fiat currency in a 1:1 ratio, meaning that the value of 1 Tether is always equivalent to 1 dollar.
Clear federal rules should anchor large global issuers like Tether Inc. and Circle inside the United States while pushing riskier projects offshore. A non-US issuer may still serve American users if the US Treasury recognizes the firm’s home regime as equivalent and the company submits to US oversight. Otherwise, American exchanges and onramps will be obliged to delist the token from their respective exchanges, effectively exporting the GENIUS ruleset to the broader market.
The EU moved first with the Markets in Crypto‑assets Regulation (MiCA), which has applied to stablecoins since June 30, 2024. MiCA distinguishes between E‑Money Tokens that track a single currency and Asset‑Referenced Tokens that follow a basket of assets. Only an EU‑authorized credit institution or e‑money institution may issue an E‑Money Token, and at least 30% of the assets backing every coin must remain on deposit with European banks or in European government bonds.
The European Central Bank may throttle the circulation of non‑euro coins if their daily payment volume inside the bloc exceeds two hundred million euros, a safeguard designed to protect monetary sovereignty. Issuers must undergo regular audits, provide a public white paper, and maintain an on‑chain freeze function. As in the United States, the regulation prohibits paying interest on the token.
The two push stablecoin issuers toward a common baseline of full, high-quality reserves, frequent public disclosures, and same-day redemption at par. Yet they diverge into three critical places.
First, the GENIUS Act keeps reserves in line with US instruments (T-bills or USD fiat currency). In contrast, MiCA requires issuers to hold a significant share onshore for coins marketed inside Europe.
Second, the European Union sets a hard usage cap on non-Euro stablecoins, while the United States imposes no currency quota but restricts foreign issuers through supervisory reach.
Third, licensing paths differ: the Office of the Comptroller of the Currency and state bank supervisors control entry in America, whereas in Europe, the gatekeepers are national financial authorities operating under a single passport backed by the European Central Bank’s veto for significant tokens.
Therefore, any stablecoin that seeks truly global liquidity must satisfy both frameworks, hold part of its collateral in European accounts, and maintain compliance teams capable of meeting two sets of disclosure calendars.
The GENIUS Act and MiCA mark the end of the stablecoin wild west and the emergence of regulated, dollar and euro-denominated digital cash. Their shared logic is simple: if a token promises one unit of real money, the law now ensures that promise is transparent and enforceable. Businesses that adapt quickly will gain seamless access to global liquidity, while those that hesitate will face an increasingly gated marketplace. At the same time, whenever a stablecoin is pegged to an actual fiat currency, the value of that fiat currency will rise depending on its popularity. One of the main goals behind the current US Administration is to retain global dominance of the US dollar by backing the largest stablecoin (USDT) with the US dollar. This also provides more security for the typical user.
Click this link to access a PDF version of the GENIUS Act.
To learn more about digital assets regulation in our region and to compare these regulations with those in other jurisdictions worldwide, click the link to the TerraLex Cross-Border Guide to Crypto Assets, which features the contribution of our experts.
Authors: Luka Džordeski, Uroš Rajić
