EU Researchers Urge MiCA Redemption Rules to Mirror US GENIUS Act Delays

Three academics affiliated with the Centre for Economic Policy Research (CEPR) have put forward a proposal arguing that the European Union should align its stablecoin redemption rules with those being drafted in the United States, rather than attempting to wall off European entities from global runs. The researchers, Edoardo Martino, Eric Monnet, and Enrico Perotti, contend that as long as MiCA guarantees immediate, fee-free redemption at par, a crisis affecting a dollar stablecoin issued across multiple jurisdictions will funnel redemption pressure toward the EU entity, draining its reserves before US authorities need to act.

The concern is structural. Multi-issuance already operates in practice: Circle issues USDC in the United States and separately through a French entity licensed under MiCA, with reserves partitioned by jurisdiction. Because the tokens are fungible, a holder anywhere can direct redemptions to whichever entity offers the most favourable terms. Current draft Office of the Comptroller of the Currency (OCC) rules implementing the GENIUS Act permit a two-business-day redemption delay, extendable to seven days when daily redemptions exceed ten per cent of total issuance, with fees applicable on top. MiCA imposes no such friction, making the EU entity the path of least resistance in a stress scenario.

The European Commission’s May consultation had already floated potential remedies including limiting redemptions to EU-resident holders, dedicated liquidity buffers, and cross-border reserve transfers. The CEPR authors argue each instrument has a critical flaw: residency restrictions are circumvented by transferring tokens to an eligible counterparty, buffers raise capacity without removing the incentive to run, and reserves are most difficult to move precisely when they are most needed because US authorities may ring-fence dollar assets during a crisis. Parliament moved in July to preserve multi-issuance subject to safeguards, rejecting calls from the European Systemic Risk Board (ESRB) for an outright ban. The CEPR proposal effectively reframes the debate, suggesting that harmonising exit conditions across jurisdictions is more tractable than restricting who can exit.