Introduction
The legal landscape for stablecoins has shifted—permanently. With the GENIUS Act now signed into U.S. law and the Markets in Crypto-Assets Regulation (MiCA) fully enforceable across the European Union, founders must make a decision: Where should they launch?
The wrong choice carries significant consequences—regulatory risk, lost market access, and potential investor pushback. The right one could open the door to institutional partnerships, bank integrations, and long-term licensing stability.
In a previous Veritas Global post, MiCA: What the EU’s Landmark Crypto Regulation Means for Founders, Funds, and Fintech Builders, we broke down the obligations, licensing standards, and asset classifications under the EU regime. This post builds on that analysis and compares MiCA to the GENIUS Act, now U.S. law, offering a founder- and GC-focused perspective on how to evaluate jurisdictional fit.
You can access the full GENIUS Act here and MiCA here.
Structural Overview: GENIUS Act vs. MiCA
| Feature | GENIUS Act (U.S.) | MiCA (European Union) |
|---|---|---|
| Jurisdiction | United States (federal law) | 27 EU Member States |
| Licensing Body | OCC / Treasury | National competent authorities (passportable) |
| Stablecoin Types Regulated | Fiat-referenced only | E-Money Tokens (EMTs) and Asset-Referenced Tokens (ARTs) |
| Reserve Requirements | 1:1 backing in USD, Treasuries, and insured deposits | Fully backed, segregated reserves; EMTs must be redeemable at par |
| Redemption Rights | Mandatory at par with public disclosure | EMTs: Mandatory; ARTs: Depends on classification |
| Audit & Disclosure | Monthly attestations + annual audits | Whitepapers, annual reporting, plus prior authorization |
| Token Design | Algorithmic stablecoins prohibited by implication | Algorithmic stablecoins banned explicitly |
| Market Access | U.S. institutions, banks, and fintechs | SEPA integration, EU fintech ecosystem |
Key Similarities
Both MiCA and the GENIUS Act reflect a shift toward bank-grade oversight of stablecoin issuers. Each regime mandates:
- Legal authorization prior to issuance
- Full reserve backing with transparent custody
- Redemption rights that align with advertised terms
- Public disclosures and periodic reporting
- Restrictions on algorithmic or synthetic models
For founders, this means that stablecoin issuance is no longer a question of MVP launch mechanics—it’s a licensing problem. Operations must now be embedded into financial compliance infrastructure from day one.
Foundational Differences
1. Scope of Regulation
MiCA governs a broad category of crypto assets: EMTs, ARTs, and utility tokens. Stablecoins fall under EMT or ART classification depending on their peg and use case.
The GENIUS Act, by contrast, regulates only payment stablecoins—tokens pegged to the U.S. dollar and used for payments or settlements. It does not cover other digital assets, utility tokens, or NFTs.
Why it matters: Projects planning multi-token architectures, reward systems, or on-chain incentives may find GENIUS too narrow unless wrapped into separate legal regimes.
2. Licensing Path
MiCA creates a single license that allows an issuer to operate across the EU. This provides efficiency—but also requires full EU incorporation and upfront legal investment.
The GENIUS Act allows three distinct issuer categories:
- Insured depository institutions (national banks)
- OCC-licensed nonbank entities
- State-chartered issuers under $10 billion in assets
This flexibility may benefit smaller issuers, but also increases ambiguity during early-stage planning.
Why it matters: Founders seeking passportability and scale may prefer MiCA. Founders seeking flexibility and U.S. financial institution access may prefer GENIUS.
3. Reserve Design and Custodianship
GENIUS restricts reserves to USD, short-dated Treasuries, and cash held with insured institutions. Monthly attestations are required, and reserve location must be disclosed.
MiCA allows a broader set of reserve assets—but mandates segregation and safekeeping in EU-based custodians.
Why it matters: If your treasury and banking partners are U.S.-based, GENIUS will align better with custody strategy. If you’re building a euro-backed or multi-currency product, MiCA offers more structural options.
Strategic Considerations for Founders
Prefer GENIUS If:
- Your stablecoin is USD-backed
- You need access to U.S. bank rails
- Your investors or customers are U.S.-based
- You are operating under an OCC or state-chartered structure
- You plan to issue a single-purpose payment token
Prefer MiCA If:
- You want to passport your license across 27 EU member states
- You are building consumer or fintech-facing apps in Europe
- You are issuing euro-pegged or commodity-backed tokens
- You are targeting non-U.S. financial partnerships
- Your business model includes non-stablecoin token issuance
What to Do Now: General Counsel Checklist
- Evaluate token design. Does your stablecoin model meet either jurisdiction’s reserve and redemption rules?
- Audit reserve strategy. Where are your reserves held, and do they meet GENIUS or MiCA eligibility?
- Model licensing timelines. MiCA authorization can take 6–12 months; GENIUS licensing may vary by entity type.
- Review disclosures and attestation systems. Both regimes require periodic reporting. Confirm audit partner readiness.
- Determine passporting needs. GENIUS does not confer cross-border rights. MiCA does.
Conclusion: Legal Infrastructure Determines Scale
Both the GENIUS Act and MiCA reflect the global shift toward regulated, institutionally-backed stablecoins. While the regulatory language differs, the trend is clear: legal design is product design.
For U.S.-focused fintechs and payment rails, GENIUS offers credible integration into domestic finance. For EU-based platforms or globally scaling apps, MiCA’s single-license model offers reach and flexibility.
Ultimately, the choice is not just legal—it’s strategic.
Need help selecting and structuring the right regulatory home?
Veritas Global helps fintech founders and investors evaluate cross-border regulatory trade-offs and build compliant product infrastructure under MiCA, the GENIUS Act, and FATF-aligned frameworks.
Schedule a strategy session or read our full insights archive to build a framework that scales.
