Global demand for clear and consistent crypto regulation has surged, with policymakers worldwide recognizing the need for frameworks that support innovation while ensuring market safety. In the US, 2025 has brought significant political momentum behind crypto legislation, such as the Senate’s passage of the GENIUS Act, which aims to regulate stablecoins.
Yet despite these advances, many crypto firms continue to favour Europe’s MiCA framework. The central question now is: Why are companies still choosing MiCA crypto regulation over US options?
The Unpredictable Crypto Regulatory Environment In The US
The US crypto space remains unpredictable, with fragmented oversight and shifting rules creating uncertainty for both developers and investors.
Fragmented Oversight
Regulation is split among the SEC, CFTC, and state bodies, such as New York’s Department of Financial Services, which enforces stringent BitLicense rules.
This patchwork approach leaves firms needing to navigate different definitions of crypto business activities and compliance standards depending on location.
Ongoing Legal Uncertainty for Tokens
A core issue is the unresolved tension over whether many tokens are classified as securities or commodities. High-profile cases involving Ripple, Coinbase, and Binance remain under legal review, leaving firms uncertain about how to comply. Adding to the confusion, even tokens previously labelled as commodities, such as XRP in the Ripple case, can be reclassified depending on legal interpretation.
Enforcement-First Approach by the SEC
Rather than clear rule-making, the SEC has relied heavily on enforcement actions to set precedent. Against the backdrop of lawsuits against Ripple, Coinbase (now paused), Unicoin, and Kraken, the agency’s settlement-driven strategy continues to unsettle market participants.
Stalled or Inconsistent Legislation
Efforts to establish coherent federal laws, like the FIT21 bill and various stablecoin proposals, have faced delays and resistance. Although the Senate passed the GENIUS Act for stablecoin oversight, broader reforms are on hold until at least 2026.
Unpredictable Delistings and Compliance Costs
Each enforcement action can trigger unpredictable delistings on major exchanges, sudden withdrawals of listed assets, or emergency compliance demands. These uncertainties translate into higher operational costs and legal risks for startups and institutional investors.
The Appeal of MiCA to Crypto Projects
MiCA crypto regulation introduces a streamlined, EU-wide licensing system that allows firms to operate across all 27 member states with just one authorization.
🇪🇺 TODAY: Coinbase secures MiCA license in Luxembourg, unlocking regulated crypto access to all 27 EU states and 450M users. pic.twitter.com/XDW78fgmvI
— Cointelegraph (@Cointelegraph) June 20, 2025
This “passporting” mechanism means a company licensed in, say, France can legally serve customers in Germany, Spain, or any other EU country without needing separate approvals.
This reduces administrative challenges, cuts legal costs, and gives companies confidence to scale across Europe, something the US crypto space doesn’t yet offer.
Greater Legal Clarity and Regulatory Certainty
Under the MiCA crypto regulation, the rules are well-defined and publicly available, covering everything from token issuance to custody and exchange services. This level of clarity allows crypto companies to make long-term strategic decisions without worrying about sudden enforcement actions or shifting interpretations.
In contrast, the US crypto space still lacks unified guidance, leaving many firms uncertain about whether they’ll face lawsuits from regulators such as the SEC or CFTC.
Boost in Investor Confidence and Activity
Clarity breeds confidence. After the MiCA crypto regulation took effect in early 2025, platforms like Paybis reported a 70% increase in trading volume from EU customers, despite a relatively small change in the number of trades. That suggests users weren’t just trading more frequently; they were making larger and more intentional investments. This shift signals growing trust in the regulatory framework environment and a more mature, stable trading landscape for serious investors.
Strict and Transparent Stablecoin Rules
MiCA doesn’t just regulate crypto tokens; it sets high standards for stablecoins too. To operate in the EU, issuers must:
- Hold full 1:1 reserves backing each coin
- Conduct regular audits for financial transparency
- Keep user funds separate from company assets
These requirements reduce the risk of stablecoin failures or liquidity crises, issues that have plagued several US-based projects. Investors and regulators alike are more comfortable working with assets that meet these robust standards.
Stronger Consumer Protections
Borrowing from traditional finance (MiFID II), MiCA incorporates consumer safeguards that are rarely seen in crypto markets. These include:
- Upfront disclosures about trading fees and risks
- Cooling-off periods to help prevent impulsive decisions
- Requirements for clear communication around token utility and risk
By setting these standards, MiCA builds retail user trust and provides a safer on-ramp for newcomers, especially important as more mainstream users enter the crypto space.
Faster Regulatory Action and Adoption
While US lawmakers continue debating federal crypto regulation, Europe has moved decisively. MiCA crypto regulation was developed over several years and officially rolled out in January 2025. This proactive approach has given companies time to prepare, adjust, and comply with the new regulations.
Meanwhile, in the US, crypto firms still face uncertainty over whether a token constitutes a security, whether staking services are permitted, or whether state-level licenses are sufficient to operate nationally, stalling innovation and prompting some firms to relocate abroad.
Can the US Catch Up?
Can the U.S. catch up to Europe in crypto regulation? Right now, it’s still behind. Europe’s MiCA crypto regulation has given the EU a head start by providing clear, unified rules for crypto firms. At the same time, the US continues to struggle with fragmented oversight and legal uncertainty. However, the tide may be turning. Legislative momentum is growing in Washington, with recent bipartisan efforts suggesting the U.S. could soon develop its own comprehensive crypto rulebook.
What the US crypto space still lacks is a unified regulatory framework. Current proposals aim to address this issue by establishing clearer lines of authority, placing digital commodities under the jurisdiction of the CFTC, securities under the SEC, and implementing joint oversight for stablecoins.
If these bills are finalized and implemented, the US could finally offer the legal certainty that crypto firms need to thrive. Backed by over $265 million in industry lobbying and bipartisan champions like Senators Cynthia Lummis and Bill Hagerty, the US may be gearing up to close the gap with Europe, but it still has ground to make up.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
If you would like to read more articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
