US Stablecoin Regulation Driving Global Liquidity Split: CertiK Report

Article Summary

• The US's new stablecoin regulatory approach (GENIUS Act) is causing a global liquidity split with the EU's MiCA regime.
• The GENIUS Act imposes strict reserve requirements and bans yield-bearing stablecoins.
• CertiK expects stablecoin liquidity to become segmented by jurisdiction, increasing cross-border settlement frictions.
• The EU's MiCA regime faces criticism for banking concentration risk.
• The US views stablecoins as a tool to maintain US dollar dominance.

Introduction

The stablecoin market is undergoing dramatic shifts driven by divergent regulatory approaches between the United States and the European Union. According to a new report from blockchain security auditor CertiK, the US's novel approach, embodied in the GENIUS Act, is causing a sharp structural split with the EU's Markets in Crypto-Assets (MiCA) regime, effectively creating separate US and EU stablecoin liquidity pools.

The US GENIUS Act: A New Era of Regulation

The report indicates that the US digital asset market entered a new phase of regulatory clarity in 2025, with federal legislation and administrative reforms broadly aligning on the issuance, trading, and custody of digital assets. Central to this shift is the GENIUS Act, signed into law by US President Donald Trump in July, which establishes the first federal framework for payment stablecoins. The law mandates strict reserve requirements, prohibits yield-bearing stablecoins, and formally integrates stablecoin issuers into the US financial system.

Global Divergence and Fragmented Liquidity

While the framework provides long-sought regulatory certainty for US issuers, the report cautions that it also accelerates global divergence with the EU's MiCA regime, leaving the US with a “distinct liquidity pool” and effectively fracturing the global stablecoin market. Consequently, CertiK anticipates that stablecoin liquidity will become increasingly segmented by jurisdiction, introducing new cross-border settlement frictions and potentially opening the door to regional stablecoin arbitrage.

Criticism of the EU's MiCA Regime

While the European Union’s MiCA regime mirrors the US GENIUS Act in requiring full redemption at par and prohibiting yield on stablecoins, it has faced criticism for introducing banking concentration risk, as the rules require a majority of issuer reserves to be held within EU-based banks. Paolo Ardoino, CEO of Tether, suggests that this structure could introduce “systemic risks” for issuers, noting that banks typically lend out a significant portion of their deposits under the fractional reserve system. Others have cautioned that MiCA's framework could also accelerate industry consolidation, raising barriers to entry for smaller issuers due to increased compliance and capital costs.

The US and Dollar Dominance

However, neither the GENIUS Act nor MiCA appears designed to preserve global stablecoin fungibility. Instead, both frameworks prioritize regulatory oversight and financial stability, while, in the case of the United States, explicitly reinforcing dollar liquidity and global dollar usage. Treasury Secretary Scott Bessent reinforced this view earlier this year, stating that the administration would take a deliberate approach to stablecoin regulation and use it as a tool to extend US dollar dominance. “As President Trump has directed, we are going to keep the US [dollar] the dominant reserve currency in the world, and we will use stablecoins to do that,” Bessent said.