1. Distinct regulatory frameworks adopted
The European Union has the MiCA regulation (Markets in Crypto-Assets) which proposes harmonized rules for issuing, trading tokens, stablecoins, crypto asset services, etc. This includes a single license that operates in all EU countries (passporting) for certain services.
In the United States, new laws like the GENIUS Act are being passed that regulate stablecoins, require 1:1 reserves, monthly transparency, etc. But the approach is more fragmented, with both federal and state regulations, and different agencies (SEC, CFTC, FinCEN) intervening in different aspects.
2. Concerns in Europe about “regulatory arbitrage”
Several regulators in the EU (for example Italy, France, Austria) have indicated that some crypto companies may be taking advantage of more permissive jurisdictions within or outside the EU to issue stablecoins, operate with soft licenses, etc. These differences can create consumer protection risks, operations with less control, etc.
In particular, France has warned that it could block the practice of “passporting” (license granted in one EU country and used by companies to operate in others) if it feels that some domestic licenses are not providing enough oversight.
3. Differences in stablecoin rules
In the U.S., under the GENIUS Act, stablecoins are required to be backed 1:1, transparency, but the regulatory instrument of who supervises, how they are licensed may vary depending on the size of the issuer, state, etc.
In the EU, under MiCA, the rules for stablecoins are stricter in some ways: capital requirements, operational standards, obligations for international issuers, user protection, reserve rules, etc.
4. Opinions of European authorities warning of risks
For example, the Bank of Italy has warned that this divergence makes crypto companies have incentives to operate where the rules are more lenient, which could weaken local regulations or allow risky operations that could negatively impact financial stability.
#StablecoinLaw , #GENIUSAct , #UE
🔍 Why is this divergence not unusual?
Regions have different political, economic, and social priorities. The EU tends to emphasize consumer protection, financial stability, transparency, and has less tolerance for systemic risk. The U.S., especially under the recent administration, has shown a greater inclination to facilitate innovation, attract investment, reduce regulatory barriers, although regulation is also present but distributed among agencies.
Legal and regulatory structures have historically been distinct: in the U.S., many rules apply at the state level in addition to federal, which creates fragmentation. In contrast, the EU seeks uniformity through supranational regulations like MiCA.
Regulatory evolution: frameworks are not established overnight. As the crypto market grows, as visible risks appear, regulators adjust their rules. Different regions are at different stages of that process.
⚡ Possible effects of this divergence
1. For crypto companies/stablecoin issuers
Those operating globally will have to comply with multiple regulations, which can increase costs, complexity of legal compliance.
Some companies may prefer to domicile or issue tokens in more “friendly” jurisdictions or with looser rules, as long as that does not imply greater legal risk or damaged reputation.
2. For international competition
The U.S. could attract more investment, startups, innovation if its regulation is seen as more agile and favorable.
The EU risks losing certain companies if the rules are perceived as too costly or slow, but it can also benefit from trust for having clearer rules for users and investors who value security/regulation.
3. For investors/users
There may be greater fragmentation: different products, stablecoins, exchanges may be available in the U.S. but restricted or with a different level of regulation in the EU, which affects liquidity, geographic/regulatory risk.
Prices, access, fees, levels of transparency can vary widely depending on which jurisdiction is operated in or where the token/company is regulated.
4. Impact on global markets
Could generate “regulatory arbitrage”: companies trying to operate from jurisdictions that give them an advantage.
Cross-border coordination issues: money laundering, sanctions, interoperability of compliance rules, etc. If each region has very different rules, there may be gaps to exploit.
5. Regulatory uncertainty
For projects that wish to scale internationally, this divergence introduces risk: they could be exposed to unexpected rules, sanctions, market blockages, etc.
Institutional investors tend to avoid assets or companies with high or uncertain regulatory risk; therefore, regulatory clarity is valuable.