Global Stablecoin Alignment is Crucial for Success

The recent joint economic agenda unveiled by French President Emmanuel Macron and German Chancellor Friedrich Merz emphasized the need for collaboration in crypto-asset regulation, acknowledging that digital money transcends borders. This recognition is vital for the success of stablecoins, which are designed to be borderless, programmable, and accessible to anyone with a smartphone. Unlike traditional payment systems, stablecoins offer a 24/7 service without the need for complex banking networks, enabling rapid cross-border transactions. However, their effectiveness relies on a unified global approach, as a fragmented regulatory landscape would undermine their efficiency and accessibility. The European Union's Markets in Crypto-Assets Regulation (MiCA) and the United States' GENIUS Act share a common foundation, requiring full reserves, redemption at par, and strict governance standards. Although there are differences between the two frameworks, they are aligned on the core principles of a safe and credible stablecoin. The main divergence lies in their approach to foreign issuers, with the GENIUS Act introducing an equivalence regime and MiCA requiring foreign issuers to establish a licensed EU entity. The next 12-24 months will be critical in aligning these regulatory frameworks, and international collaboration is essential to create a coordinated transatlantic approach. This would provide businesses and consumers with confidence in the use of stablecoins, regardless of where they are licensed, and create a global public good. Failure to collaborate would lead to a regulatory vacuum, filled by unregulated offshore actors or fragmented national systems, ultimately hindering the evolution of stablecoins into a backbone of real-time, global commerce.