Stablecoin regulation has quietly become one of the most consequential policy races in global finance. The scale tells the story: a market grown from $28 billion in 2020 to $306 billion today, processing $33 trillion in annual transaction volume, with Citi projecting $1.9 trillion by 2030. It is a contest between governments over who controls the plumbing of the future monetary system. 

In a recent episode of The Gage, we spoke with Elise Soucie Watts, Executive Director of Global Digital Finance — representing over 70 firms globally — and former FCA policy lead, about the fault lines shaping this race. 

The Core Question: What Makes a Stablecoin “Real” Money? 

Central banks hold one principle above all others when it comes to monetary stability: the singleness of money. As Elise explained, the concept is straightforward: “a pound is worth a pound is worth a pound.” Every form of money — whether cash, bank deposits, or digital tokens — must be exchangeable at par, at all times. The Bank for International Settlements and the Bank of England have both championed it as non-negotiable.¹ ² 

If privately issued stablecoins trade at varying values, the unit of account underpinning everything from mortgage pricing to payroll begins to fracture. The $40 billion collapse of Terra/Luna in 2022 brought this into sharp focus.⁵ ⁶ But as Elise argued in her co-authored paper Single Minded, the response has been disproportionate. “Algorithmic stablecoins have largely been brushed off the table,” she noted. The real question is how well-structured, reserve-backed stablecoins interact with the existing monetary system. 

Her central argument is that regulators should focus on first principles rather than treating singleness as a standalone objective. “If you have sensible regulation that looks at those fundamental first principles — backing assets, redemption mechanisms — singleness will follow,” she said.⁴ 

Elise also challenged the assumption that redemption on demand is the test of sound money. “We need seamless convertibility between different forms of money,” she argued — not the ability to redeem everything into physical cash at all times, something even traditional bank deposits cannot always deliver, as Silicon Valley Bank depositors discovered in March 2023.³ Well-structured stablecoins do not threaten singleness. They extend it. 

For firms bridging digital and traditional finance, this distinction shapes whether regulation enables institutional participation or inadvertently excludes it. 

MiCA vs. the GENIUS Act: Two Philosophies, One Deadline 

The EU and the US have now both published comprehensive stablecoin frameworks, but the philosophies are markedly different. Elise offered an important caveat: “MiCA is currently live,” she noted. “The GENIUS Act is not live, nor does it yet have any rulemaking.” Comparing them directly risks overlooking that “a lot of the devil is going to be in the details.”⁹ 

MiCA is a single rulebook across 27 member states, categorising digital assets into three types, mandating reserve segregation, and providing passporting rights — with full compliance required by July 2026.⁷ ⁸ As Elise observed, it is “much more detailed and prescriptive,” which offers firms clarity but introduces operational constraints, including redemption timelines that can be “operationally quite challenging.” 

The GENIUS Act, signed in July 2025, carves stablecoins out of SEC and CFTC jurisdiction, placing them under the OCC and the Federal Reserve. It requires 1:1 USD backing and segments the market between federally insured banks and approved non-bank issuers. Elise was clear about the intent: “the US really does have a vision where they want to see stablecoins scale within their economy.” That ambition extends globally through reciprocity provisions encouraging worldwide adoption of dollar-backed stablecoins, while growth directly drives demand for US Treasuries.⁹ 

The GENIUS Act also prohibits issuers from paying interest to holders, designed to prevent deposit flight from traditional banks. Crypto platforms have responded with “rewards” and “loyalty points” that banking groups argue are interest by another name. A White House-brokered compromise is expected by March 2026.¹⁰ ¹¹ 

For institutions, regulatory strategy is now jurisdiction-dependent. A structure that works under MiCA may not hold under the GENIUS Act, and neither may translate into the UK’s FCA regime — which takes a third path: proportionate, sandbox-driven, and still evolving, with its crypto gateway opening in September 2026.¹² ¹³ 

The Real Competition Is Not Brussels vs. Washington 

While the EU and US refine their frameworks, a second tier of jurisdictions is moving with precision. The UAE, Hong Kong, and Singapore have each turned regulatory clarity into an economic development strategy.¹⁴ Elise singled out the UAE, noting that “they are actually considering how yield or interest could be generated from stablecoins — very different to what we are seeing in other jurisdictions.”¹⁵ 

This reflects a fundamental strategic choice. “Jurisdictions need to think about what they are trying to do when they set up a stablecoin framework,” Elise argued. “Do you want stablecoins to scale and grow? If so, building a competitive, innovation-friendly framework is important. If your intent is to protect domestic markets, your regime will probably look a little different.” Hong Kong launched its framework in August 2025 with a HK$25 million capital requirement.¹⁶ Singapore continues to attract capital with no individual capital gains tax and a measured approach.¹⁴ ¹⁷ The market is providing its own signal: USDC, the compliance-first stablecoin, grew 73% in 2025 — double the 36% growth of USDT — suggesting regulatory credibility is becoming a competitive advantage. 

The next frontier will require cooperation. “These technologies are so fundamentally cross-border,” Elise observed, “yet we are increasingly in an era of geopolitical fragmentation.” “There has never really been a less popular time to be a global standard setter,” she reflected — yet multilateral agreements will be essential for stablecoins to deliver on their cross-border promise. 

This is where the conversation connects directly to what we do at Greengage. We work with digital asset companies, crypto-native businesses, and institutional clients who need financial infrastructure built on regulatory certainty, not speculation. The firms that position themselves under defined frameworks today will be the ones attracting institutional capital tomorrow. 

The stablecoin story is no longer about whether these instruments have a future. It is about which jurisdictions — and which firms — will shape it. 

Listen to the full conversation with Elise Soucie Watts on The Gage podcast. 

Sources 

1. King’s College London, “Single Minded? Singleness of Money and Stablecoins”
2. Bank for International Settlements, “The Next-Generation Monetary and Financial System,” Annual Economic Report 2025
3. Digital Pound Foundation, “Rethinking the Singleness of Money: A New Framework for Stablecoins”
4. Global Digital Finance & CCI, “Bank of England: Proposed Regulatory Regime for Sterling Stablecoins”
5. Emerald Publishing, “Risks ofDecentralisedFinance: The Terra-Luna Case” 
6. ResearchGate, “Algorithmic Stablecoins: Mechanisms, Risks, and Lessons from the Fall ofTerraUSD”
7. Ashurst, “Custody of Stablecoin Reserves UnderMiCA”
8. Adam Smith Consulting, “MiCARegulation: 2026 Guide for Licensing & Compliance”
9. GENIUS Act, Wikipedia
10. Disruption Banking, “CLARITY Act Showdown: March 1 Red Line on Stablecoin Yield”
11. Ledger Insights, “White House Stablecoin Yield Fix: Why the Wording Matters”
12. FCA, “Stablecoin Payments a Priority for 2026”
13. Sidley Austin, “UKCryptoassetRegulation — Action Points for 2026–27” 
14. CCN, “Crypto Regulation Scorecard 2025: Which Countries Got It Right”