Regulators on both sides of the Atlantic are preparing for a new stage in digital assets regulation. Speakers at OMFIF’s Digital money summit in May 2026 compared their approaches.
In the US, while the Genius Act is now a well-established framework for stablecoins, its successor Clarity, which primarily aims to formalise rules on cryptoasset market structures, is still embroiled in debates.
The substance of one of the key debates is the question of stablecoin remuneration. Under the Genius Act, stablecoins are prohibited from paying interest to ensure that they do not compete too strongly with bank deposits.
Some stablecoin issuers and cryptoasset exchanges circumvent that prohibition by paying rewards to stablecoin holders on their platform. The Clarity Act may make this illegal, although the present formulation would allow rewards for transactions, rather than passive holding rewards.
Regulatory blind spots
At the Digital money summit, other Genius Act blind spots were highlighted. Timothy Massad, former Commodity Futures Trading Commission chair, pointed out that there is only a contractual, rather than a statutory, right to redemption.
Europe took an early global leadership position with its Markets in Crypto-Assets regulation, which entered into force in June 2023. On 20 May 2026, however, the European Commission issued a public consultation for what market participants are calling MiCA 2.0.
L-R: Austin Elwood, Wolfram Seidemann, Ulrich Strohmeier, John Jackson, Katie-Ann Wilson
The consultation is expected to address a number of perceived gaps in the MiCA framework. The most novel component will most likely be a licence requirement and embedded supervision for decentralised finance markets. DeFi markets, though a small subset of overall cryptoasset markets, have specific products presently being delivered through decentralised services. Some of these products resemble banking activities of lending and investing but are handled primarily through smart contracts in decentralised environments and are therefore unlicenced.
DeFi products often involve a combination of staking (immobilising tokens to participate in ensuring the integrity of the protocol for a return), then issuing tokens representing the ownership of staked assets, decentralised lending on margin and other operations that combine sophisticated financial engineering with crypto-specific techniques. These are often layered to generate outsized yields.
Some at the summit adopted a ‘buyer beware’ position. Andrew Forson, chief executive officer of DeFi Technologies, said investors should realise that products offering high returns, far outstripping government bond yields, require extensive due diligence to interrogate the robustness of the claims involved. He suggested that investors who fail to do this work should not be entitled to protection by regulators.
MiCA 2.0
Nevertheless, the next iteration of MiCA is looking at this marketplace. The decentralised nature of the protocols makes them difficult to supervise but, often, there is a human involved in (and profiting from) selling these instruments. While the marketplace is small, its complexity makes it an important site for regulators to target.
MiCA 2.0 may also re-open the question of allowing stablecoins to pay yield. Like the Genius Act, MiCA prohibits the payment of yield by most stablecoins. However, this question is being re-examined in the public consultation.
L-R: Andrew Forson, Carla Carriveau, Felix Haynes, Laura Weil, Erwin Voloder
MiCA defines two types of stablecoins: e-money tokens, which are traditional stablecoins backed by assets denominated in the same currency as the stablecoin; and asset referenced tokens, which are stablecoins backed by assets denominated in multiple currencies and commodities. Asset-referenced tokens are more exotic products, which are permitted to pay yield under certain conditions. As yet, no asset-referenced tokens have been licenced under MiCA, so the European Commission will re-examine the framework to see if it is too obstructive.
UK regime expected in 2027
In the UK, the Financial Conduct Authority is consulting on its own cryptoasset supervision regime, which is expected to go live in 2027. Matthew Long, the FCA’s director of payments and digital assets, joined the Digital money summit to detail the regime’s remit – stablecoin issuance, cryptoasset trading platforms, safeguarding cryptoassets, staking and arranging deals in qualifying cryptoassets.
The FCA will collect feedback on its proposed regime over the next few months, then open it for applications between the end of September 2026 and March 2027. Long warned prospective applicants to apply early in order to ensure that the FCA can ask questions regarding the details of their application and still process it in time for the regime’s launch in October 2027.
Lewis McLellan is Head of Content of the Digital Monetary Institute at OMFIF.
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