The Only Constant is Change: State of Crypto Regulations Across the Globe (Part 1)

As featured in the Uitgeverij Den Hollander Compliance, Ethics and Sustainability Journal

Introduction – The Race Is On

The world’s major financial centres are racing to become the dominant hub for institutional cryptocurrency adoption, as crypto intersects more meaningfully with traditional finance (TradFi). With the rise of fiat currency-backed stablecoins, the familiarity of regulation and real-world value is drawing more TradFi institutions. The stakes are clear: jurisdictions that provide regulatory clarity first will attract the capital, talent, and infrastructure that define tomorrow's financial system.

For business leaders and compliance professionals, this regulatory competition offers both opportunity and complexity. Companies can weigh jurisdictional differences for strategic advantage, whether choosing where to launch crypto products or structure their operations.

In this first part, we focus this article on three jurisdictions leading this regulatory race: the US and EU as the world's largest financial markets and the UK leveraging its historical role as a global financial hub. In the next part, we continue with Singapore as a leading innovator in blockchain and digital assets and the financial centre of Asia, and the UAE as the gateway between East and West. We outline key developments in each country’s approach, how they balance innovation with security, and considerations for regulated institutions and compliance professionals navigating the global patchwork of regulations.^[1]

US – Drastic shift towards a procrypto policy agenda

In the six months following President Donald Trump’s second inauguration, major changes to regulatory guidance, enforcement priorities, and proposed regulations clearly signal the US’s intent to be a global leader in digital assets and attract lawful market participants.

Two days into his second term, President Trump confirmed a dramatic shift in the approach to digital asset regulation by signing an Executive Order aimed at ending “regulatory overreach” in the crypto sector and establishing the US as “the world capital of crypto”. ^[2][3] The Executive Order gave agencies 60 days to review existing regulations and recommend whether they should be rescinded or modified, effectively rebooting US crypto policy. Regulators were directed to provide clear jurisdictional boundaries, safeguard open access to public blockchain networks, and promote the growth of lawful, dollar-backed stablecoins. However, these policy shifts and reversals only offer real business opportunities, if accompanied by the right compliance controls.

1. Policy reversals with caveats

While the recent shifts in US policy are positive for businesses and financial institutions seeking to engage with digital assets, they must continue adhering to existing financial regulatory obligations and risk and compliance practices. Federal priorities may have changed, but they still have the power to prosecute violations of law.

In parallel with the White House’s broader crypto strategy, the Securities and Exchange Commission (SEC) has signalled a major shift in its regulatory and enforcement approach. In January 2025, the SEC announced a new task force responsible for delivering clear regulatory lines, developing realistic paths to registration, and deploying enforcement resources more judiciously, pivoting away from its previously cautious and enforcement-heavy stance on digital assets. ^[4] As demonstrated by dismissals of civil enforcement actions or cases against crypto market participants such as Kraken,^[5] Coinbase,^[6]  and Robinhood,^[7],[8] these measures have signalled a pivot towards enforcement under the Trump administration. However, the SEC has committed to continue to regulate fraud and enforce securities laws, while balancing a commercially grounded posture that acknowledges the unique features of blockchain technology.

Similarly, the Department of Justice (DOJ) has shifted its enforcement priorities, effectively ending its prior approach of “regulation by prosecution”.^[9] On 7 April 2025, Deputy Attorney General Todd Blanche issued a memorandum stating that the DOJ will “focus on prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing”. ^[10] This aligns the DOJ’s enforcement approach with recent Executive Orders and focuses on protecting individual and private-sector interests rather than targeting digital asset platforms, such as cryptocurrency exchanges, for inadvertent violations of regulation or acts by its end users.

US banking regulators have also loosened prior regulatory guidance for its supervised institutions. The Office of the Comptroller of the Currency (OCC),^[11] Federal Deposit Insurance Corporation (FDIC),^[12] and the Federal Reserve Board (FRB)^[13] all withdrew prior guidance which previously required financial institutions to either notify or receive a non-objection prior to engaging in digital asset-related activities. These policy reversals offer new opportunities for TradFi to directly compete with technology-oriented disruptors who have historically offered digital asset capabilities from exchange services to tokenized offerings, including stablecoin issuance.

2. Classifying digital assets and clarifying regulatory oversight

US regulators have long debated the definition of digital assets, their classification under securities and commodities law, and how digital assets and institutions engaging digital assets should be supervised. With proposed legislation actively under review by both chambers of the US Congress, more clarity is on the horizon. Firms must remain vigilant and review how their digital assets will be classified under law, enhance programme and control measures aligned to anti-fraud and anti-money laundering (AML) requirements, and prepare for new registration and supervision requirements based on the classification of the firm’s digital asset portfolio.

A new proposal named the Digital Asset Market Clarity (CLARITY) Act of 2025, which was introduced in the US House of Representatives by the Committees on Financial Services and Agriculture on 29 May 2025, is a recent attempt to clarify regulatory oversight over digital assets, delineate roles between US regulatory agencies, and classify certain digital assets.^[14] The CLARITY Act divides oversight of digital assets between the SEC and the Commodity Futures Trading Commission (CFTC) and determines whether a digital asset falls under securities or commodities law.

More importantly for compliance professionals, under the CLARITY Act, both the SEC’s and CFTC’s anti-fraud and anti-market manipulation authority will be enforced in addition to the application of the Bank Secrecy Act and its related AML requirements for those defined as ‘financial institutions’ (e.g., digital commodity brokers and dealers).^[15] On 17 July 2025, the CLARITY Act was passed by the US House of Representatives.^[16] If passed by the US Senate and signed into law, the bill would establish the US’s first dedicated market structure for digital assets, shifting from regulation by piecemeal oversight toward a forward-looking, rule-based clarity, and greater transparency on asset classification and the respective rules of the SEC and the CFTC.

3. Stablecoins at the centre of new legislation

Institutional demand, emerging payment use cases, and TradFi’s entry to the market have made stablecoins a priority for US lawmakers and the Trump administration. On 18 July 2025, President Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, establishing a new regulatory framework for digital assets, specifically “payment stablecoins”.^[17] Under the GENIUS Act, stablecoin issuers seeking to operate in the US or market participants providing payment stablecoins to any persons in the US, will be required to comply with this new federal regulatory framework focused on transparency, consumer protection, and licensing and supervisory requirements, including those related to US AML laws.

The GENIUS Act defines a “payment stablecoin” and provides clarification that payment stablecoins are not to be considered securities or commodities—removing them from SEC and CFTC jurisdiction. The GENIUS Act also requires payment stablecoins to be issued by a “permitted payment stablecoin issuer”, which may include subsidiaries of insured depository institutions, institutions approved by the OCC to issue payment stablecoins (e.g., non-bank entities), or smaller issuers chartered under a state payment stablecoin regulator. Payment stablecoin issuers are also subject to the Bank Secrecy Act and its related AML requirements applicable for financial institutions. After 3 years, restrictions would also apply for those operating secondary markets, as “digital asset service providers” (e.g., cryptocurrency exchanges) would be prohibited in offering or selling certain stablecoins, unless issued by a permitted payment stablecoin issuer. Additional requirements include mandatory one-to-one reserve backing, reserve composition limitations, prohibition of interest or yield-bearing payment stablecoins, and robust transparency and disclosure requirements.^[18]  

The GENIUS Act is expected to take effect in late 2026 once federal regulators issue its final implementing regulations. The US will then be able to effectively compete with other jurisdictions which have already established and advanced stablecoin frameworks, including the EU, UAE, and Singapore. The GENIUS Act therefore levels the playing field while prioritizing consumer safeguards, reducing systemic risk, and establishing clearer oversight over stablecoin issuers operating in the US.

UK – Policymaking through industry engagement and consultation

The UK is pursuing a different regulatory path that emphasizes industry consultation and phased development over rapid implementation. The Cryptoassets Roadmap outlines the various regulatory discussion papers and consultations the FCA plans to release throughout 2025, with final policy statements due to be published in 2026.^[19] Rather than fast-tracking legislation, the FCA is opting for a collaborative approach-engaging industry stakeholders within the private sector through these discussion papers. UK cryptoasset firms should actively participate in this consultative effort which provides an opportunity to provide feedback, shape future regulation, and have foresight into the FCA’s priorities. For compliance programmes, these are opportunities to educate regulators on how to better align regulatory requirements to mitigate appropriate risks, while balancing operational limitations and efficiency considerations as a result of new policies.  

As with other jurisdictions, stablecoins are a key focus for the UK’s financial regulatory authorities. In response to prior proposals, the His Majesty’s (HM) Treasury issued draft legislation in April 2025 which defines qualifying cryptoassets and qualifying stablecoins and brings newly regulated activities, including the issuance of qualifying stablecoins in the UK and safeguarding qualifying cryptoassets under the scope of the FCA. In May 2025, the FCA also published two consultation papers outlining proposed rules for the issuance of stablecoins and the custody of cryptoassets in coordination with the Bank of England.^[20],^[21] The proposals mandate that stablecoin issuers maintain full reserve backing, ensuring each token is supported by equivalent assets. Additionally, firms providing custody services must implement robust systems to safeguard client assets and ensure their accessibility, segregating all client assets from the firm’s own assets, held under non-statutory trusts.

EU – MiCAR’s remaining challenges post-implementation

The EU’s Markets in Crypto-Assets Regulation (MiCAR) – which took full effect on 30 December 2024 – was the West’s first comprehensive approach to regulating digital assets, including stablecoins. However, certain challenges remain from the issuance of compliant stablecoins to operational challenges during transitional periods. Notably, stablecoin issuers must quickly consider whether to uplift programmes to adhere with MiCAR to operate in the EU or face market exit.

MiCAR introduces a uniform framework for crypto-asset issuers (CAIs) and crypto-asset service providers (CASPs). CAIs and CASPs across all 27 EU Member States are expected to complete their transition to the new MiCAR framework by July 2026, as MiCAR replaces the fragmented national regimes with a harmonized rulebook that enforces robust standards on transparency, governance, and AML.

MiCAR categorizes crypto-assets into three types: Asset-Referenced Tokens (ARTs), E-Money Tokens (EMTs), and other crypto-assets like Bitcoin or utility tokens. ^[22] The regulation introduces strict requirements for stablecoin issuers, including mandatory authorisation for CASPs, transparent white papers for issuers, and a ban on anonymous token offerings. ^[23] Reserve requirements under MiCAR are stringent; stablecoins must maintain a 1:1 reserve ratio, ^[24] with up to 60% of reserves held in bank deposits for significant issuers. ^{[25], [26]}

1. Transitional period challenges

Under Article 143(3) of MiCAR, Member States can shorten the standard 18-month transitional period (January 2025 to July 2026) allowing a fragmented rollout. The “grandfathering” clause allows pre-existing crypto service providers to continue operating under local rules until they receive or are denied MiCAR authorisation, or until July 2026. While countries like France, Italy, and Spain are using the full period, others, such as Germany, the Netherlands, and Sweden, have opted for shorter 12-month transitions to sooner align with MiCAR.^[27] These differences reflect each country’s regulatory maturity, market readiness, and policy priorities. For example, Germany already requires Federal Financial Supervisory Authority (BaFin) licensing for crypto custody, creating dual compliance during the transition.^[28] In addition to obligations under existing EU anti-money laundering directives, this provides added complexities for crypto operators as they attempt to comply with existing national requirements while seeking MiCAR authorisation across various transitional periods as defined by each Member State.

This reinforces, especially in a transitional environment, firms with well-designed compliance programmes that show good faith efforts to mitigate risk are essential to meet the current national requirements and satisfy new, EU-wide standards under MiCAR. Routine evaluation and testing of AML programmes by independent parties can also strengthen a company’s AML posture to ensure alignment with AML directives, evolving regulatory requirements, and expectations before, during, and after MiCAR authorisation processes.

2. Impact of non-compliant ARTs and EMTs

The implementation of MiCAR’s rules for ARTs and EMTs, effective from 30 June 2024, has already begun transforming Europe’s stablecoin landscape. The shift intensified when the EBA and the ESMA issued coordinated public guidance clarifying how non-compliant stablecoins are to be treated under the regulation. The EBA emphasized that issuers of ARTs and EMTs must be fully authorised under MiCAR to continue operating in the EU,^[29] while ESMA instructed CASPs, in a January 2025 statement,^[30] to halt trading and promotion of non-compliant stablecoins by the end of January, with temporary “sell-only” access allowed through Q1 2025, allowing users to liquidate existing positions.

In response, major exchanges including Coinbase, Kraken, Binance and OKX began delisting non-compliant stablecoins, including Tether (USDT).^[31] Stablecoin issuer Tether confirmed that the company would not seek MiCAR registration, citing concerns over reserve requirements to be held with EU banks.^[32] However, Circle, the issuer for USDC, has secured an EU e-money license, and is positioning itself as a MiCAR-compliant alternative to gain ground among institutional users and platforms seeking legal clarity and institutional grade stability.^[33]  

Crypto firms willing to seek MiCAR-compliant status should first prioritize its understanding of the potential risks associated with new crypto-related offerings, including those associated with non-compliant ARTs and EMTs. Through risk assessment processes, CAIs and CASPs can effectively assess the risks tied to new and existing offerings, including the issuance, listing and delisting of tokens, and to remediate any potential MiCAR-related regulatory and compliance gaps. This is critical for stablecoin issuers as more TradFi institutions, who are well-versed with the risk management processes, begin to compete for stablecoin market share. These developments mark a new chapter for stablecoins in the EU-one defined not only by compliance, but by consolidation around those players willing and able to operate within MiCAR’s clear but demanding framework.

Conclusion

In this geopolitical contest for digital asset leadership, a government’s success will hinge on its ability to strike the balance between enabling growth and innovation while safeguarding consumer trust. For compliance officers, the competitive landscape demands active monitoring and strategic positioning. The US policy reversal creates immediate opportunities, but legislative processes remain unpredictable. While the UK aligns on its final policy considerations, the EU's MiCAR framework, despite implementation challenges, provides a comprehensive rulebook and is already reshaping global stablecoin markets. Meanwhile, Singapore and the UAE have established themselves as innovation-friendly alternatives with proven licensing pathways.

For firms willing to venture into and/or expand their crypto reach, we suggest three immediate priorities: First, assess your company’s specific ambitions in these core markets and whether the opportunities presented can be effectively managed by existing processes or require significant uplift. The current environment poses constant pressure on compliance organisations to keep pace with product and business ambitions. Compliance officers should thoroughly understand the risks of any new opportunity and whether additional capabilities, internal controls or resources may be required. Second, engage actively in consultations were possible – especially in the UK and US – if not to influence outcomes, then to stay on top of the regulatory debate. Third, once operational, regularly review, test and enhance compliance programmes in the context of evolving regulations to maintain your regulatory and reputational standing. Regulated firms and their compliance programmes must be responsive to different requirements, especially those operating across multiple jurisdictions. These measures will not only minimize the institution’s risk exposure but help risk and compliance programmes scale and remain compliant in the face of emerging regulatory changes.

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Continue to the next section, where we focus on two jurisdictions, Singapore as a leading innovator in blockchain and digital assets and the financial centre of Asia, and the UAE as the gateway between East and West.