Regulating 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 fundamental differences between the policy goals pursued by the EU and the US, with MiCAR seeking to ring-fence the EU's financial and monetary system while the GENIUS Act prioritizes innovation and widespread adoption. We examine seven key regulatory variables that make stablecoins money-like and limit the risks of allowing private parties to issue money-like claims, demonstrating how different decisions by EU and US policymakers impact the nature of stablecoins and the risks they imply. This Essay provides essential insights for policymakers, legal scholars, and market participants navigating the rapidly evolving stablecoin regulatory landscape.