The GENIUS Act signed by the US president and the new MiCA regulations from the European Union significantly alter stablecoin regulation.
Standardized Stablecoin Regulations in the US and EU
President Trump signed the GENIUS Act on July 18, 2025, which shapes new stablecoin regulations in the US. At the same time, the EU enacted MiCA regulations, standardizing digital finance practices across Europe. Chief advocates in the US include Senators 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 the potential risks associated with innovations in the stablecoin sector. Economist Daniel Lacalle commented on how regulations could shift global payment structures, predicting 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.
With the introduction of the GENIUS Act and MiCA regulations, a new era of stablecoin regulation is emerging, aimed at enhancing the stability and security of financial systems around the world.
