# GENIUS Act vs MiCA: how US and EU stablecoin rules compare

> The US GENIUS Act (signed July 2025) and the EU's MiCA (fully in force December 2024) are the two most consequential stablecoin regulatory frameworks in the world. Both require 100% reserve backing and issuer licensing, but they differ sharply on reserve composition, who regulates whom, how foreign issuers are treated, and what happens to yield. This article maps the differences side by side.

6 min read · Updated 2026-06-09 · Topic: regulation

Canonical: https://tempo.dataos.so/articles/genius-act-vs-mica

The United States and the European Union have each enacted a stablecoin regulatory framework within the past two years. The EU's **MiCA** regulation has been in force since mid-2024; the US **GENIUS Act** was signed in July 2025. Together they set the terms for any stablecoin issuer that wants to reach either market — which together represent the majority of regulated stablecoin demand.

The two frameworks share a common philosophy: 100% liquid reserve backing, mandatory issuer licensing, transparency obligations, and AML compliance. But the details diverge in ways that matter for issuers, exchanges, and businesses choosing which stablecoins to use.

## At a glance

| Dimension | GENIUS Act (US) | MiCA (EU) |
|---|---|---|
| **Enacted / in force** | Signed 18 July 2025 | Stablecoin rules from 30 June 2024; full application from 30 December 2024 |
| **Stablecoin types covered** | Payment stablecoins (fiat-pegged, fixed-redemption) | E-money tokens (EMT, single fiat peg) and asset-referenced tokens (ART, any other reference) |
| **Reserve requirement** | 100% — US cash, ≤93-day Treasuries, overnight repos, qualifying MMFs | 100% — minimum 30% in segregated bank account; rest in low-risk liquid instruments (EBA-specified) |
| **Reserve rehypothecation** | Expressly prohibited | Expressly prohibited |
| **Issuer license required** | Yes — OCC-approved nonbank, insured bank subsidiary, or state-certified issuer | Yes — EU electronic money institution (EMI) or credit institution license |
| **Regulatory body** | OCC (federal nonbank issuers); Fed + states (bank subsidiaries); Treasury chairs the SCRC | National competent authority (NCAs); EBA for significant EMTs and all significant ARTs; ESMA for CASP/market integrity |
| **Monthly disclosures** | Yes — reserve composition, total supply, custody geography; examined by public accountant | Yes — white papers, reserve reports; EBA regulatory technical standards specify content |
| **Annual audit** | Required for issuers >$50B outstanding (non-public) | Required; frequency/scope set by EBA RTS |
| **Interest/yield to holders** | **Prohibited** | No explicit prohibition; but reserve investment constraints prevent most yield pass-through |
| **Significant-token limits** | No explicit daily-volume cap in the statute | **€200M daily transaction cap** for significant EMTs |
| **Foreign issuers** | May serve US persons through registered intermediaries if OCC-registered and comparable home regulation | Must hold an EU EMI or credit-institution license (or passport one); no equivalence shortcut for direct offering |
| **CASP / exchange licensing** | Separate from issuer rules (existing money-transmitter, broker-dealer frameworks apply) | Mandatory CASP license from 30 December 2024; EU-wide passport |
| **AML obligations** | Explicitly subject to Bank Secrecy Act | Subject to EU AMLD; CASP and issuer obligations aligned |
| **Algorithmic stablecoins** | Not addressed explicitly (definition requires fixed-redemption backing; unbacked designs fall outside) | ARTs cover many hybrid designs; purely algorithmic with no backing would struggle to qualify |
| **CBDCs** | Excluded from definition | Excluded from definition |
| **Transitional period** | 180-day state-certification window; rulemaking timetables pending | CASP grandfather period until 1 July 2026; EMT/ART rules applied from 30 June 2024 |

## Reserves: same headline, different composition

Both frameworks require that every token in circulation be backed one-for-one with liquid assets. The divergence is in the **composition rules**.

The **GENIUS Act** permits US currency, demand deposits, Treasuries of ≤93 days, overnight repos backed by Treasuries, and qualifying money market funds. It does not mandate a minimum percentage in bank deposits; an issuer could theoretically hold the entire reserve in Treasury bills via a money market fund.

**MiCA** requires at least **30%** of EMT reserves to sit in a segregated credit-institution account — i.e., a bank deposit. The remaining 70% must be in low-risk, highly liquid instruments specified in EBA regulatory technical standards. The mandatory bank-deposit floor is higher than anything the GENIUS Act requires, and it creates a practical constraint: EMT issuers must maintain banking relationships in the EU.

## Issuer authorization: licensing pathways compared

Under the **GENIUS Act**, there are three routes to becoming a permitted issuer:
1. A subsidiary of an FDIC-insured bank (uses existing charter)
2. A federally qualified nonbank issuer approved by the OCC
3. A state-qualified issuer under a framework certified as substantially similar to federal standards (capped at $10B outstanding)

Under **MiCA**, there is effectively one pathway: hold an **EMI or credit-institution license** issued by an EU national competent authority. A single license then passports across all 27 member states. There is no state-level equivalent route, and no small-issuer carve-out comparable to the US $10B cap.

The practical result: MiCA requires a deeper regulatory footprint in Europe than the GENIUS Act requires in the US for a nonbank issuer. Circle's decision to obtain French EMI authorization — a process that took roughly two years — illustrates the investment required.

## Foreign issuers: equivalence vs. registration

This is one of the largest structural differences between the two frameworks.

**MiCA** allows no equivalence shortcut for direct token offering. A foreign issuer that wants to offer an EMT to EU users must either obtain an EU EMI license itself or license a locally-incorporated subsidiary. There is no "comparable foreign regime" door that permits a non-EU issuer to offer directly. (This is why USDT, issued by Tether in the BVI, is absent from EU exchange order books as of March 2025.)

The **GENIUS Act** takes a more flexible approach. Foreign issuers that do **not** hold a US issuer license may still offer their stablecoins to US persons through US-licensed digital-asset service providers, provided they: (1) operate under a home-country regime the Treasury Secretary deems comparable, (2) register with the OCC, (3) maintain US reserves sized to local customer liquidity needs, (4) have no sanctioned-jurisdiction exposure, and (5) comply with US asset-seizure orders. Non-compliance triggers Treasury designation and civil penalties up to $1 million per day.

## Yield: explicit prohibition vs. structural constraint

The **GENIUS Act** explicitly bars issuers from paying holders any interest or yield on a payment stablecoin. The reserve yield stays with the issuer; this is how Tether and Circle generate revenue. The prohibition is a feature, not a bug — Congress drew a sharp line between stablecoins and deposit-taking to prevent regulatory arbitrage with the banking system.

**MiCA** contains no equivalent explicit prohibition, but the practical effect is similar. EMT reserves must be held in instruments that qualify under the E-Money Directive framework — conservative, low-risk assets — and the regulatory expectation is that the token behaves like e-money, not an investment product. Most MiCA-compliant issuers do not pass reserve yield to retail token holders.

## Timelines and what's still pending

MiCA is the more operationally mature framework: stablecoin rules have been live since June 2024, the CASP licensing regime since December 2024, and the market has already adapted (USDT delistings, USDC growth in EU). Most EBA and ESMA regulatory technical standards are finalized or near-final.

The GENIUS Act's effective date was July 2025, but issuer licensing, reserve composition details, and foreign-issuer equivalence determinations are subject to further rulemaking by the OCC, Federal Reserve, and Treasury. As of mid-2026, that rulemaking is in process, and the full operational framework is not yet complete.

## The bottom line

MiCA and the GENIUS Act are more similar than different at the top line — both require 100% backing, mandatory licensing, disclosure, and AML compliance. The gaps that matter for issuers and businesses are: the EU's mandatory bank-deposit floor in reserves, MiCA's harder line on foreign issuers (no equivalence route), the US's explicit interest prohibition, and the EU's daily-volume cap on significant stablecoins. Any issuer serving both markets must satisfy both sets of rules — and in several cases, the more demanding provision of each will govern. For a detailed look at each framework individually, start with [The GENIUS Act explained](/articles/genius-act-explained) and [MiCA explained](/articles/mica-regulation-explained).

## FAQ

**Do the GENIUS Act and MiCA have the same reserve requirements?**

Both require 100% backing with high-quality liquid assets, but the composition rules differ. The GENIUS Act permits US Treasuries up to 93-day maturity, overnight repos, and qualifying money market funds, with no explicit minimum held in bank deposits. MiCA requires at least 30% of EMT reserves in a segregated bank account, with the rest in low-risk liquid instruments; the specific asset mix is set by EBA regulatory technical standards.

**Which framework is stricter on foreign issuers?**

MiCA is stricter in the sense that it requires any issuer offering to EU users to hold a local EMI or credit-institution license (or passport one from another EU member state). The GENIUS Act allows foreign issuers to continue serving US persons through intermediaries if they register with the OCC and meet equivalence conditions, without requiring a US charter.

**Does either framework allow stablecoins to pay interest?**

The GENIUS Act explicitly prohibits issuers from paying holders interest or yield on a payment stablecoin. MiCA does not contain an equivalent explicit prohibition, but EMT rules require that funds received be safeguarded as e-money and invested only in low-risk instruments — in practice, most MiCA-compliant issuers do not pass reserve yield to retail holders.

**When did each framework come into force?**

MiCA's stablecoin rules (Titles III and IV) applied from 30 June 2024; the full regulation including CASP licensing applied from 30 December 2024. The GENIUS Act was signed on 18 July 2025 and certain provisions require additional rulemaking before they are fully operational.

## Sources

1. [S.1582 — GENIUS Act, 119th Congress — Congress.gov](https://www.congress.gov/bill/119th-congress/senate-bill/1582)
2. [EUR-Lex — Regulation (EU) 2023/1114 (MiCA full text)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1114)
3. [Gibson Dunn — The GENIUS Act: A New Era of Stablecoin Regulation](https://www.gibsondunn.com/the-genius-act-a-new-era-of-stablecoin-regulation/)
4. [EBA — Asset-referenced and e-money tokens (MiCA)](https://www.eba.europa.eu/regulation-and-policy/asset-referenced-and-e-money-tokens-mica)
5. [Gibson Dunn — Global Stablecoin Rules in Focus](https://www.gibsondunn.com/global-stablecoin-rules-in-focus-a-cross-border-guide-to-the-new-era-of-stablecoin-regulation/)

---
Neutral, sourced explainer from tempowiki. Index: https://tempo.dataos.so/llms.txt