Senate Should Study EU MiCA Outcomes Before CLARITY Vote

The EU’s Markets in Crypto-Assets regulation, MiCA, moved from its transitional period to full enforcement on July 1. Of an estimated 1,100 to 1,300 firms with national virtual asset registrations, about 340 appear on the European Securities and Markets Authority register with full crypto-asset service provider authorizations as of early September. The conversion rate is under one third and the market remains weighted toward dollar-pegged tokens.

European Central Bank accounting shows 98% to 99% of stablecoins are pegged to the U.S. dollar and about 0.2% to the euro. Tether’s USDT is effectively absent from many EU markets after its issuer declined to apply for MiCA e-money token authorization. Tether CEO Paolo Ardoino has argued that the regulation’s reserve rules “introduce counterparty and systemic risk rather than mitigating it.”

By contrast, Circle obtained an electronic money institution license in France in July 2024 and lists USDC and EURC as authorized e-money tokens on ESMA’s register. Market data from August 2026 show dollar-pegged tokens held roughly 60% of stablecoin market capitalization. With USDT largely unavailable, some users faced forced conversions or liquidations.

The European Commission opened a targeted consultation in May that runs through the end of September asking whether the stablecoin rules harm competitiveness and whether the absence of an equivalence framework for third-country issuers limits access to global liquidity.

MiCA replaced a patchwork of national rules with an EU-wide passporting system and created a regulated status for e-money tokens. The framework assigns supervision mainly to national authorities across 27 member states, and the commission has proposed moving direct oversight of crypto-asset service providers to ESMA.

The EU experience highlights policy differences U.S. lawmakers are debating ahead of the Senate cloture vote on the Digital Asset Market CLARITY Act on Sept. 15. MiCA requires significant shares of stablecoin reserves to be held as deposits in EU credit institutions, with a 30% floor for typical issuers and higher requirements for larger ones. An alternative model in U.S. proposals would anchor reserves in short-dated U.S. Treasury bills and similar high-quality liquid assets.

MiCA restricts distribution of yield from regulated stablecoins. Those limits coincided with demand shifting toward interest-paying products outside the e-money token framework. Banking groups have urged Capitol Hill to address what they describe as regulatory gaps that allow yield on token balances. Critics say prohibiting yield by legal form could move demand to products with similar economic features.

With the Senate scheduled to vote on cloture Sept. 15, proponents and opponents of CLARITY are citing the EU’s MiCA experience in arguments over reserve composition, yield rules and the allocation of oversight between the SEC and CFTC.