The Stablecoin Divide: Why the US Is Unlocking Crypto While Europe Shuts It Down

I chose to live in Dubai for a simple reason: it's the clearest, fastest, and most practical place on Earth to build ventures today.

And this week, we saw it in the crypto field.

This week's announcement from U.S. regulators about stablecoins isn't just news—it's a turning point. The U.S. finally clarified that fully collateralized stablecoins, like USDT and USDC, aren't securities if they're backed 1:1 by liquid assets. No ambiguity. This isn't a minor regulatory footnote; it’s a strategic move positioning America as crypto's new Eldorado.

For years, ambiguity crippled the U.S. market. Entrepreneurs hesitated; investors pulled back. But that uncertainty has just vanished. Now, exchanges, wallets, and market-makers can confidently scale, knowing precisely where the line is drawn. Stablecoins are the backbone of crypto liquidity—not because of retail usage, but because institutional traders use them for instant settlements, continuous issuance, and yield opportunities. Liquidity is their value proposition, not an accessory.

Yet, across the Atlantic, Europe has chosen an opposite and self-defeating path. The EU’s MiCA regulations, rather than harnessing the potential of stablecoins, systematically undermine their entire value:

• Interest payments banned, eliminating incentives for institutional involvement.
  
  
• Issuance capped at €200 million daily, insufficient for serious market needs.
  
  
• A mandatory 60% reserve held in less stable, less liquid EU banks.
  
  
• Complex licensing, audits, and entity structures significantly increasing the barriers to entry.
  
  

On the surface, MiCA appears responsible and cautious. Practically, it strips stablecoins of their core functionalities. The result? Crypto liquidity in Europe will evaporate. Tether, holding over $91 billion in U.S. Treasuries and earning more than $6 billion annually in yield, cannot rationally comply. It won’t sacrifice its profitable, secure, and liquid position to adhere to an economically illogical EU policy.

What’s happening to USDT under MiCA will inevitably apply to all crypto ventures in Europe. Liquidity will flee, finding more accommodating shores. Europe is essentially regulating crypto out of existence within its borders. And what happen in crypto will reflect in AI and everything else.

In contrast, the UAE and now clearly the U.S. are moving forward. Dubai is practical, ambitious, and swift. It's not burdened by bureaucratic indecision but driven by tangible results. The U.S., after years of hesitation, is finally positioned as the definitive crypto hub.

My strategy—and what I believe to be the winning approach—is clear:

Anchor your business in the UAE for its unparalleled regulatory clarity and speed. Expand aggressively into the U.S., the emerging crypto powerhouse.

Europe made its choice, and the consequences are already unfolding. The future of crypto and business in general won’t wait for regulations to adapt; it will follow clarity, speed, and liquidity. The divergence isn’t theoretical—it’s practical, immediate, and inevitable.