Stablecoins without borders Stablecoin multi-country issuance and dollar-run risks in Europe1

Circle now issues USDC from both the US and a French subsidiary, with both versions moving through the same smart contract. That technical detail matters more than it sounds. Once tokens are commingled on-chain, the ledger stops recording where they were issued, only where they can be redeemed, and holders will always route towards whichever jurisdiction offers the safest, cheapest exit. Because EU rules under MiCAR guarantee redemption at par at any time, while the US GENIUS Act allows issuers to impose fees and delays, the EU becomes the default pressure valve for any run on dollar stablecoins, wherever that run originates. In this Policy Insight, Edoardo Martino, Eric Monnet and Enrico Perotti argue that the European Commission's current proposals, which focus on restricting who can redeem in the EU, miss the point: they don't touch the underlying arbitrage. Instead, the authors call for automatic, contract embedded circuit breakers, fees and gates triggered the moment outflows cross a set threshold, mirroring the OCC's proposed 10% rule for US issuers, plus a systemic exception power for the ECB to suspend redemptions in extremis. Absent such safeguards, they warn, Europe is exposed to dollar runs it cannot control and, in a crisis, may not be able to stop.