EU Updates MiCA Framework Amid Stablecoin Dominance and US GENIUS Law

The European Union is updating its crypto regulatory framework, MiCA, to include stablecoins in an effort to compete with the US's GENIUS law. This move comes as the EU struggles to adapt to the evolving financial sector and the growing dominance of dollar-backed stablecoins.

Stablecoins have diverted billions of euros and threatened the stability of the banking system, while the GENIUS law allows issuers to keep their reserves in US public debt, strengthening the dollar's position. The EU requires stablecoin issuers to deposit their reserves in traditional banking systems, a measure considered too restrictive by industry players.

This has led to a massive influx of users to compliant platforms such as Kraken and OKX, while Binance suspended its services for European residents after failing to obtain a license. Some European startups are considering moving part of their operations to Switzerland or Singapore, where regulations are more flexible.