Stablecoin regulation in Europe and beyond

MiCA has applied to stablecoins since June 30, 2024 and to service providers since December 30, 2024. It knows two kinds. An e-money token references one official currency, and only a bank or an e-money institution may issue it. An asset-referenced token references anything else and needs its own authorization. Holders of e-money tokens redeem at par at any time, interest is banned under Article 50, and at least 30 percent of reserve funds sit in separate bank accounts. The European Banking Authority supervises tokens that grow significant. The MiCAR page covers the whole regulation.

The GENIUS Act, signed on July 18, 2025, admits only permitted payment stablecoin issuers, requires one-to-one reserves in cash and short-term Treasuries, bans interest for holders and treats issuers as financial institutions under the Bank Secrecy Act. Foreign issuers need a home regime that the Treasury finds comparable. An ECB blog post judged the US law broadly similar in spirit to MiCA but more lenient in some areas.

The UK splits the work. The FCA set out its regime for fiat-referenced stablecoins in consultation paper CP25/14: issuing a qualifying stablecoin and safeguarding cryptoassets become regulated activities, tokens are backed one to one and redeemable at par, and backing assets are held on a statutory trust for holders. The Bank of England supervises sterling stablecoins that become systemic. It dropped the planned holding limits for them in favor of a temporary issuance limit of 40 billion pounds per coin and lets issuers hold up to 70 percent of backing assets in short-term UK government debt.

Hong Kong's Stablecoins Ordinance took effect on August 1, 2025. Anyone who issues a fiat-referenced stablecoin in Hong Kong, or a Hong Kong dollar stablecoin anywhere, needs a license from the HKMA, and only coins of licensed issuers may be offered to retail investors there, as Davis Polk summarizes.

Swiss franc stablecoins and FINMA's approach are on the Frankencoin page and the crypto in Switzerland page. In Germany, MiCA applies directly, and BaFin licenses the e-money institutions and supervises the banks that issue tokens. The MiCA in Germany page explains how the German rules fit around it.

Finance Loop is the meeting place for compliance, legal and payments teams who apply these rules. The Crypto Assets Conference in Frankfurt, which Finance Loop has partnered with, brings the financial industry together with supervisory authorities and politics. Finance Loop supported the Bybit EU Crypto Evening on compliance under MiCAR and is strategic partner of the Digital Euro Association.

MiCA, Regulation (EU) 2023/1114. It sorts stablecoins into e-money tokens and asset-referenced tokens and sets rules for issuers and for the firms that trade or hold them.

MiCA covers more firms, since it also licenses exchanges and custodians, and it sets a minimum share of bank deposits in the reserve. The GENIUS Act focuses on issuers. Both require full reserves, redemption at par and a ban on interest.

BaFin supervises the banks and e-money institutions that issue tokens in Germany. For a significant token the European Banking Authority takes on part or all of the supervision.