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WASHINGTON, DC - JANUARY 23: U.S. President Donald Trump signed a range of executive orders ... More pertaining to issues including crypto currency and Artificial Intelligence. (Photo by Anna Moneymaker/Getty Images)
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The current state of US-European geopolitics may rightly be dominating much of the media, but it’s far from the only area of disagreement between the two historic allies. The regulatory treatment of digital assets has long been a point of divergence.
Throughout Joe Biden’s presidency, with Gary Gensler at the helm of the SEC, the US became less of a regulatory gray area than a black hole for operators – even those willing to play ball. The announcement in June 2023 that it had Coinbase in its crosshairs for acting as an unregistered securities dealer following the company’s IPO only two years previously was a particularly low point for the industry.
At the same time, the EU’s slow regulatory wheels were grinding away, culminating in the implementation of the EU’s MiCA regulation last year. Given the state of play in the US, many firms seemed prepared to shift their strategic focus to the European markets. Indeed, a spate of MiCA license applications have recently been awarded to firms, including eToro, OKx, and Bitget.
But it’s clear that under the Trump administration, the US crypto regulatory landscape is set to change significantly. The question is how, and with the EU’s MiCA now in implementation, what will it mean for the industry as a whole?
A shift in the stablecoin landscape
Given their demand and market dominance, stablecoins aren’t going anywhere, but how they’re treated already looks set to be a key area of divergence. MiCA imposes strict rules on issuers – to the point that USDT is now delisted from several European exchanges due to Tether’s failure to comply. Germany’s financial regulator, BaFin, has also identified deficiencies in Etherna’s USDe that are in violation of MiCA requirements and ordered an immediate issuance halt.
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