CertiK highlights the emergence of distinct stablecoin markets following diverging regulatory approaches by the US and EU. The U.S. prioritizes integrating stablecoins into its financial system with the GENIUS Act, while the EU focuses on mitigating risk under MiCA legislation. These divergent strategies are creating two separate liquidity zones for stablecoins: one in the U.S., governed by a stricter framework closely tied to the domestic banking system, and the other in Europe, shaped by MiCA’s emphasis on stability and consumer protection. 2025 marks a turning point as stablecoin liquidity clusters around these incompatible regulatory systems, leading to operational divergence. CertiK argues that this shift is driven more by US policy than market forces. The GENIUS Act has defined the framework for stablecoin issuance in the U.S., aligning their operation with domestic financial norms rather than international standards. In contrast, the EU’s MiCA legislation focuses on risk mitigation and bolstering consumer protection. While these rules serve as a stabilizing force within the EU landscape, they also pose challenges for smaller fintech companies entering this regulated market. The report suggests that these divergent regulatory frameworks will lead to fragmented markets. U.S. stablecoins and European stablecoins may face price gaps due to limited liquidity between them. This could result in regional arbitrage strategies and inefficiencies in cross-border settlements. Notably, the U.S. Treasury Secretary has explicitly stated that stablecoin regulation is part of a broader strategy designed to reinforce the dollar’s global role. This highlights the increasing significance of stablecoins as tools for economic statecraft. As a result, the divergence between US and EU regulations will continue, with each jurisdiction prioritizing its own agenda, rather than aiming for global uniformity in the stablecoin market.