The rising cryptocurrency market requires an established legal framework to ensure user safety. However, due to resistance to change and a lack of knowledge, developing appropriate legislation for the issuance and trading of cryptocurrencies has been a real challenge for global jurisdictions. But while, at first, cryptocurrencies were met with reluctance, access to these digital assets is now more efficient.
Users can obtain information more easily to learn how to buy cryptocurrency, build a stable portfolio, and grow as either investors or traders. But for this to happen, they need applications, blockchains, and networks that facilitate transactions and allow them to benefit from decentralization, which sets them apart from outdated centralized systems.
This entire ecosystem should be supported by the right legal framework that imposes KYC policies, proper taxation, and a secure approach towards all kinds of currencies. Therefore, two of the leading world jurisdictions, the US and the EU, have established unique regulations for cryptocurrency use, and we will analyze their efficiency, starting with the hypothesis that the US’s GENIUS might be more advanced than the EU’s MiCA.
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Table of Contents
How does GENIUS operate?
GENIUS is the Guiding and Establishing National Innovation for U.S. Stablecoins Act, introduced in 2025 as an effort to regulate stablecoins. It targets stablecoins, which are generally considered safer than regular cryptocurrencies, requiring all issuers to ensure that stablecoins are backed 1:1 by the US dollar or other safe currencies, including cash and short-term treasuries.
GENIUS supports federal and state-level oversight of issuers, which must conduct frequent audits of their businesses to demonstrate transparency and accountability. The bill also encourages regulated dollar stablecoins to boost the economy, but that doesn’t mean all other stablecoins will not be integrated into existing financial systems.
What about MiCA?
The Markets in Crypto Assets Regulation is the EU’s most ambitious project since 2024 to regulate cryptocurrencies. It focuses on two main types of tokens: asset-referenced tokens (ARTs) and e-money tokens (EMTs). It received support for oversight from the European Banking Authority, thus having a unified approach. Compared to GENIUS, the legislation also focuses on custodians, portfolio managers, and the regulation of exchanges, as well as the management of market abuse rules.
On the other hand, the view on monetary sovereignty is more limited, especially regarding non-euro stablecoins. The strategy can be rather defensive of the national currency, whereas GENIUS still encourages innovation by being open to all kinds of stablecoins. That’s why MiCA can ban or heavily restrict stablecoins that don’t meet strict expectations, while also having centralized supervision.
Despite the differences, both regulations focus on systemic risk containment
Leveraging cryptocurrencies comes with the risks of volatility and scams, but these are present even in regulated markets. What must be done instead is prevent them from affecting users by managing the evolving legal landscape. Regulating stablecoins has been the closest to efficiency, as they’re considered low-risk assets, and mitigating their risks involves settling them in US dollars.
At the same time, both regulations protect users from vanity coins, as several crypto projects have failed over time due to a lack of use cases and on-point technology. Moreover, there is even less appetite for these types of coins on the market, since most are valuable only in closed networks, which is also the case for meme coins and low-market-cap tokens.
Which regulation seems to be more effective?
Considering the newness of both legal frameworks, it can be difficult to quantify their impact on the use of cryptocurrency. At first glance, we can see that MiCA is more restrictive and focused on banning, while GENIUS allows greater freedom of use and business activity as the cryptocurrency industry has grown considerably over the past decade.
In terms of what would be most helpful to the community and institutional investors, fraud protection is by far the most necessary. Different countries approach KYC (Know Your Customer) differently, but the main goal is to ensure the identity of the person making transactions is legitimate. This is needed to prevent money laundering or fraud. Luckily, employing this policy is evolving fast, covering DeFi (decentralized finance) and even NFTs (non-fungible tokens), which are important contributors to the cryptocurrency system.
What do crypto users think about these regulations?
Opinions are split on a legal framework for cryptocurrencies. Some believe it is necessary for companies and governments to trust them, which is the main goal, considering people’s willingness to use them in the real world. This could help them leverage crypto more easily for regular transactions, whether small or large, without fear that financial institutions will prohibit it.
On the other hand, some consider overseeing cryptocurrency a risk that could centralize the ecosystem and destroy the very thing crypto and blockchain are trying to create: a decentralized, transparent, and affordable ecosystem for everyone.
It is unlikely that legal frameworks will diminish the appeal of coins, especially Bitcoin, but it might happen if stringent regulation impedes the market’s evolution. This is because some coins may be considered “white-listed” because they’re fully regulated, while others risk being “blacklisted” due to their lack of compatibility with the financial system.
But will regulated cryptocurrency become more valuable?
Highly regulated cryptocurrencies have the opportunity to be pushed in terms of price and value by institutional- and regulatory-friendly flows. However, regulators must prepare for this dynamic to change the fundamentals of cryptocurrencies, as they’re becoming more secure and privacy-focused. At the same time, centralized coins can be traded like triple-A securities as they share several features with Central Bank Digital Currencies.
Final considerations
Trying to regulate cryptocurrencies has proven difficult even for the most advanced governments, as categorizing these coins and imposing the same rules and guidelines as fiat money requires careful consideration. Luckily, the US and EU have established new legal frameworks for treating stablecoins, with the GENIUS and MiCA acts that govern how issuers should operate the offerings of these coins in accordance with the law. While GENIUS is considered less strict, MiCA has adopted stringent regulations to protect the euro.
