Regulating Centralized Stablecoins: Comparing MiCAR and the GENIUS Act

The stablecoin market has exploded from niche trading instruments to a $250 billion sector, yet this growth has occurred largely in a regulatory vacuum that favors issuers over consumers. This Essay conducts the first analysis of how the European Union’s Markets in Crypto-Assets Regulation ("MiCAR") and the recently enacted U.S. Guiding and Establishing National Innovation for U.S. Stablecoins Act (the "GENIUS Act") address the governance of stablecoins from a private law perspective. Through our extensive study of major stablecoin issuers Circle and Tether, we identify four critical private law deficiencies: wildly asymmetrical terms of service, ambiguous customer rights in digital assets, tenuous redemption systems, and perilous standing for coin holders in issuer bankruptcy. We also show that, despite the availability of straightforward private ordering solutions, market leaders have failed to adopt adequate protections for their customers. Our comparative analysis reveals that while both MiCAR and the GENIUS Act represent substantial regulatory advances, they employ markedly different approaches. MiCAR emphasizes comprehensive conduct obligations and strict liability regimes, while the GENIUS Act focuses on operational requirements and unprecedented bankruptcy protections. The success of these regulatory interventions will ultimately depend on how effectively they remedy the private law shortcomings we identified, the content of future agency rulemaking, and the interaction of these new rules with the evolving dynamics of the stablecoin market.