Blab Crypto
Europe Prepares MiCA 2.0 Amid Growing Stablecoin Adoption and U.S. Regulatory Advances
Europe is poised to rewrite its crypto playbook as stablecoins surge across the continent. The Markets in Crypto‑Assets (MiCA) regulation, which went into effect in December 2024, was originally designed for spot crypto assets. Yet the explosive rise of dollar‑pegged tokens and tokenised assets has stretched the rulebook’s reach.
The European Union’s review is already underway, prompted by a stablecoin market that now dominates the digital‑asset landscape. Policymakers have moved from a cautious posture to a more measured stance, balancing innovation with prudential safeguards. The European Central Bank (ECB) has repeatedly warned that widespread use of stablecoins could erode euro‑zone monetary policy, yet it has signaled a willingness to permit stablecoins on bank balance sheets for remittance purposes.
According to John Orchard, chairman of the Digital Monetary Institute at OMFIF, the ECB’s position is now that “they are willing to tolerate stablecoins on bank balance sheets and perhaps as a remittance tool, but they don't want stablecoins for wholesale settlement.” Orchard notes that the ECB’s preferred path remains a central bank digital currency (CBDC) rather than euro‑stablecoins.
Across the Atlantic, the United States has taken a decisive regulatory step with the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in 2025. The act defines payment‑stablecoins and assigns oversight to the Federal Reserve and the Office of the Comptroller of the Currency. According to DeFiLlama data, dollar‑denominated tokens account for $310 billion of the $311 billion global stablecoin market, while non‑dollar stablecoins are negligible. The U.S. framework also tackles yield distribution and the risk of deposit flight—concerns that stalled the Clarity Act.
The European Commission is now contemplating a review of reserve requirements that could mirror the GENIUS model. Orchard added that the Commission is “toying with the idea of reviewing the reserve requirements so that a GENIUS‑Act‑like model could exist, where the stablecoin operator might buy money‑market instruments from European governments instead of routing the money back into the banking system.” One proposal on the table is the creation of a synthetic European safe asset that would serve as collateral for euro‑stablecoins.
A key debate centers on multi‑issuance stablecoins such as Circle Internet’s USDC, which can be minted by several legal entities across jurisdictions. The original MiCA design was meant to accommodate such models, but the ECB and other EU stakeholders have voiced reservations about the associated risks. Catarina Veloso, director of regulatory and compliance at Notabene, remarked that “One of stablecoin’s main value‑adds is that it’s not a payment system built within a specific jurisdiction.” Veloso argues that imposing geographic limits would force issuers like Circle Europe to create fragmented versions of USDC for the EU.
Centralisation of MiCA supervision is also under discussion. The European Securities and Markets Authority (ESMA) could assume a larger role to reduce inconsistencies among national competent authorities. Orchard cautioned that such a shift would require regulatory updates and could risk bureaucratic delays.
From a business perspective, the choice of jurisdiction matters. Denzel Walters, head of Luxembourg at crypto trading firm B2C2, said that Luxembourg’s regulatory environment and expertise in cross‑border services make it an attractive base for European operations. Walters added that the outcome of regulation should “not be the regulation itself” but rather the ability of businesses to grow.
While stablecoins dominate the conversation, other blockchain developments are progressing in parallel. Zcash’s upcoming Tachyon upgrade aims to scale shielded payments and improve quantum readiness, testing the protocol’s governance and funding structure.
In short, Europe is moving toward a MiCA 2.0 framework that will accommodate the growing role of stablecoins in institutional finance. The United States has already established a comprehensive regulatory regime under the GENIUS Act. The EU’s potential reserve‑requirement review, support for multi‑issuance models, and debate over centralised supervision will shape the next phase of crypto regulation.
The European Union’s review is already underway, prompted by a stablecoin market that now dominates the digital‑asset landscape. Policymakers have moved from a cautious posture to a more measured stance, balancing innovation with prudential safeguards. The European Central Bank (ECB) has repeatedly warned that widespread use of stablecoins could erode euro‑zone monetary policy, yet it has signaled a willingness to permit stablecoins on bank balance sheets for remittance purposes.
According to John Orchard, chairman of the Digital Monetary Institute at OMFIF, the ECB’s position is now that “they are willing to tolerate stablecoins on bank balance sheets and perhaps as a remittance tool, but they don't want stablecoins for wholesale settlement.” Orchard notes that the ECB’s preferred path remains a central bank digital currency (CBDC) rather than euro‑stablecoins.
Across the Atlantic, the United States has taken a decisive regulatory step with the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in 2025. The act defines payment‑stablecoins and assigns oversight to the Federal Reserve and the Office of the Comptroller of the Currency. According to DeFiLlama data, dollar‑denominated tokens account for $310 billion of the $311 billion global stablecoin market, while non‑dollar stablecoins are negligible. The U.S. framework also tackles yield distribution and the risk of deposit flight—concerns that stalled the Clarity Act.
The European Commission is now contemplating a review of reserve requirements that could mirror the GENIUS model. Orchard added that the Commission is “toying with the idea of reviewing the reserve requirements so that a GENIUS‑Act‑like model could exist, where the stablecoin operator might buy money‑market instruments from European governments instead of routing the money back into the banking system.” One proposal on the table is the creation of a synthetic European safe asset that would serve as collateral for euro‑stablecoins.
A key debate centers on multi‑issuance stablecoins such as Circle Internet’s USDC, which can be minted by several legal entities across jurisdictions. The original MiCA design was meant to accommodate such models, but the ECB and other EU stakeholders have voiced reservations about the associated risks. Catarina Veloso, director of regulatory and compliance at Notabene, remarked that “One of stablecoin’s main value‑adds is that it’s not a payment system built within a specific jurisdiction.” Veloso argues that imposing geographic limits would force issuers like Circle Europe to create fragmented versions of USDC for the EU.
Centralisation of MiCA supervision is also under discussion. The European Securities and Markets Authority (ESMA) could assume a larger role to reduce inconsistencies among national competent authorities. Orchard cautioned that such a shift would require regulatory updates and could risk bureaucratic delays.
From a business perspective, the choice of jurisdiction matters. Denzel Walters, head of Luxembourg at crypto trading firm B2C2, said that Luxembourg’s regulatory environment and expertise in cross‑border services make it an attractive base for European operations. Walters added that the outcome of regulation should “not be the regulation itself” but rather the ability of businesses to grow.
While stablecoins dominate the conversation, other blockchain developments are progressing in parallel. Zcash’s upcoming Tachyon upgrade aims to scale shielded payments and improve quantum readiness, testing the protocol’s governance and funding structure.
In short, Europe is moving toward a MiCA 2.0 framework that will accommodate the growing role of stablecoins in institutional finance. The United States has already established a comprehensive regulatory regime under the GENIUS Act. The EU’s potential reserve‑requirement review, support for multi‑issuance models, and debate over centralised supervision will shape the next phase of crypto regulation.
