Since the implementation of MiCA in the EU and the shift in US policy under President Trump, both jurisdictions have progressed in crypto legislation, albeit with distinct approaches. Europe got a head start by becoming the first to establish a comprehensive and unified regulatory framework for crypto-assets. Meanwhile, the US is catching up, with more capital to offer and a larger user base.
Manouk Termaaten, CEO of Vertical Studio AI, and Erwin Voloder, Head of Policy at the European Blockchain Association, shared their perspectives with BeInCrypto on the areas where the EU and the US are demonstrating leadership in the high-stakes development of crypto legislation and who will ultimately set the pace for global crypto regulation.
EU’s MiCA and Early Regulatory Certainty
By implementing the Markets in Crypto-Assets (MiCA) regulation on December 30, 2024, the European Union made history as the first jurisdiction to create a complete regulatory structure for crypto-assets that applies to all its member nations.
Since then, leading companies like Standard Chartered, MoonPay, BitStaete, Crypto.com, and OKX, to name a few, have secured their licenses.
The United States, in turn, was slower to act. Instead of lobbying for comprehensive crypto legislation, industry leaders have concentrated on getting approval from the US Securities and Exchange Commission (SEC). Under the Biden administration, that turned out to be a particularly hard feat.
“The EU definitely had a first-mover advantage in getting regulatory certainty out the gate with MiCA. Especially since at the time, the US was retreating from leadership in the digital asset space and the industry was facing what amounted to persecution back home in many cases,” Voloder told BeInCrypto.
Former SEC Chair Gary Gensler became known within the walls of the crypto industry as being particularly hostile toward the technology, taking a controversial regulation-by-enforcement policy stance. Crackdowns became common, and many innovators packed their bags and moved abroad, seeking opportunities in friendlier jurisdictions.
“The US relied on existing agencies like the SEC instead of building a unified crypto law. Remember, Gary Gensler almost cracked down on the market and caused massive fear but never managed to get anything through. This does not mean regulation will never come and creates legal uncertainty that’s driven many projects overseas,” Termaaten said.
Now, under Trump, things have taken quite a turn.
How Does the US Approach Crypto Innovation?
The Trump administration aims to foster a predictable environment for US crypto innovation and expansion through clear regulatory frameworks. It strongly emphasizes keeping that innovation within the United States to establish its global leadership.
In pursuit of this goal, the administration has created working groups and task forces to develop detailed regulatory frameworks, including stablecoins and crypto asset classification guidelines.
“What we’ve seen under the Trump administration so far has been a complete roll-back of Biden-era regulations and weaponization of the agencies against crypto in favour of a light- touch, pro-innovation stance. He’s dismantling the DOJ’s Crypto Enforcement Team, the SEC’s new Crypto-Asset Task Force has a new mandate, under new leadership in Commissioner Pierce, and there’s ongoing investigations in the House against the systematic de-banking of digital assets businesses, and banks with revelations coming to light almost weekly,” Voloder explained.
As part of this new chapter in crypto regulation, the United States intends to forge its path, developing distinct crypto regulations rather than adopting the EU’s MiCA framework. Its intent diverges significantly from the European approach.
MiCA’s Regulatory Framework in the EU
MiCA provides the EU with a comprehensive and unified regulatory framework for crypto assets, extending bank-like rules focused on financial stability and consumer protection.
The regulation mandates licensing for crypto service providers and stablecoin issuers, aligning them with traditional finance and supporting the creation of a Central Bank Digital Currency (CBDC) as a digital euro to safeguard monetary sovereignty.
“The EU treats crypto as part of its traditional financial system– it’s cautious, centralized, and prioritizes regulation through MiCA and the upcoming digital euro (CBDC),” Termaaten told BeInCrypto.
The US, however, operates with a contrasting attitude.
US Focus on Private Innovation and Opposition to CBDCs
Trump has clearly stated that he intends to eliminate any regulations that promote CBDCs, citing concerns about government overreach and the erosion of financial freedom.
The United States now charts a policy course that champions blockchain technology through private innovation while firmly opposing CBDCs. This stance is underscored by a recent executive order in which the White House argues that CBDCs “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.”
Trump has also clarified that stablecoins are the priority for innovation, as they can help reinforce US dollar dominance.
Meanwhile, a notably fragmented approach has characterized the advancement of crypto legislation in the US. The absence of nationwide regulations has allowed certain states to establish an early lead, but others continue to lag in pursuing crypto innovation.
“The US, especially under Trump’s recent shift, is leaning harder into private-sector innovation, explicitly opposing a CBDC and focusing on blockchain as a new tech frontier, which the USA will be the capital from. The EU’s approach is about control and stability; the US’s is about flexibility and economic leadership through innovation. Both aim to protect consumers, but through very different methods,” Termaaten said.
These fundamentally different philosophies also allow for the analysis of which regulations yield the most favorable outcomes.
What are the Financial Burdens of MiCA Compliance?
The significant investment companies must make to obtain a MiCA operating license has drawn scrutiny. Though member states set varying fees, these are generally steep.
“[There are] high costs that are not in proportion compared to the gain for a business. It also just adds a layer of legal complexity most projects dont want to bring into their project. At Vertical AI, we decided it’s strategic to proceed with becoming compliant, but others could just geo-block EU users to avoid the burden,” Termaaten told of his personal experience.
MiCA mandates minimum capital requirements based on the crypto services offered. These range from €50,000 for advisory and order-related services to €125,000 for exchange and trading platforms and up to €150,000 for custody services. Businesses must maintain this capital as a financial safeguard.
Beyond minimum capital requirements, companies must factor in government and legal fees, local presence costs, bank setups, and ongoing operational costs.
“MiCA is an expensive regulation. Compliance in Europe can be an exorbitant expense and I think the main challenge going forward at least for start-ups is justifying the high up-front costs of advisory, licensing, auditing etc., when many of these companies have a fixed burn they need to manage. The last thing you want to be doing as a start-up is piling all of your capital into compliance when that money could have been put to better use developing/refining your product and your GTM,” Voloder told BeInCrypto.
In contrast, the US allows crypto companies greater leeway to innovate.
Flexible Regulatory Stance and Private Sector Innovation in the US
While the European Union’s MiCA regulation establishes a comprehensive and structured regulatory environment, the United States has opted for a more flexible regulatory stance.
This approach prioritizes the growth of private blockchain innovation, aiming to encourage rapid development and technological advancement within the crypto industry by providing a less restrictive regulatory environment.
“The US favors letting the private sector innovate, especially with USD-backed stablecoins, which it believes can expand dollar dominance globally. This approach avoids centralization while still enabling digital payments innovation. It’s very much a “let the market lead” philosophy. In my opinion, the way to go with crypto,” Termaaten told BeInCrypto.
Should the US continue developing crypto-friendly legislation, it will quickly position itself to outpace Europe in this regulatory race.
“The EU still leads in terms of finalized law (MiCA), but the US is regaining ground by openly backing the crypto industry and promising regulatory clarity. If that clarity turns into actual, friendly regulation, the US will become more attractive than the EU– especially for developers and fintech firms who value speed and scale + access to more venture capital,” Termaaten said, adding that, “While the EU is a large crypto market, the US still dominates in capital, user base, and market liquidity.”
This contrasting approach, favoring a more agile and less burdensome regulatory environment, illustrates the fundamental differences in how each jurisdiction envisions the future of digital finance.
Will the US or EU Ultimately Secure Global Leadership?
While the European Union secured an early advantage in the global crypto regulatory landscape through the comprehensive and unified framework of MiCA, its thoroughness and the significant financial investment required for licensing have inadvertently created barriers to rapid innovation.
This situation has opened a window of opportunity for the United States, particularly with the shift in administration under Trump. By adopting a more permissive and innovation-centric approach, dismantling perceived regulatory obstacles, and prioritizing private blockchain development, the US is quickly emerging as the preferred jurisdiction for crypto innovation.
Despite Europe’s regulatory clarity, the US’s focus on flexibility, coupled with its robust capital markets and extensive user base, positions it to potentially eclipse the EU as the true leader in fostering the next wave of crypto advancements, provided it can deliver on its promise of clear and supportive legislation.
