Cryptocurrency Regulations Around the World

The global split is no longer “pro-crypto” versus “anti-crypto.” It is permissioned intermediaries versus open networks.

Cryptocurrency regulation now turns on a simpler question than the slogans suggest: who can regulators identify, license, supervise, and punish? Across most major jurisdictions, lawmakers are not trying to regulate base-layer code line by line. They are building legal perimeters around stablecoin issuers, custodians, exchanges, brokers, promoters, and banks. FATF’s June 2025 update showed that 101 of 163 surveyed jurisdictions permit virtual assets and VASPs, while an increasing minority prohibit them, and 73% of 117 relevant respondents had passed Travel Rule legislation. That is not laissez-faire. It is a coordinated push to make crypto legible through intermediaries, as reflected in FATF’s June 2025 update.

The decentralization tension is structural. A network can be globally distributed at the validator level and still fail the regulatory test if a foundation, multisig, or issuer can unilaterally upgrade contracts, freeze balances, or direct treasury policy. The reverse is also true. A product can satisfy regulators by concentrating control in a licensed operator even while preserving the marketing language of Web3. In practice, regulation is rewarding systems with clear choke points and penalizing systems whose authority is too diffuse to supervise. That improves accountability for users. It also pulls market access toward recentralized control surfaces, a tension that also appears in blockchain governance models.

The United States is becoming more permissive, but not more coherent.

The U.S. position is still structurally fragmented. FinCEN’s long-standing framework treats many exchange and transmission activities involving convertible virtual currency as money transmission under the Bank Secrecy Act. That means the American perimeter for crypto began with AML obligations, not with a unified answer on when tokens are commodities, securities, or something else. That classification problem still shapes debates over security tokens vs. utility tokens.

The biggest federal change came on July 18, 2025, when the GENIUS Act became Public Law No. 119-27. The law creates a federal framework for payment stablecoins, requires permitted issuers, mandates 1:1 reserves in cash or similarly liquid assets, and requires monthly reserve disclosures. State regulation remains possible, but only up to $10 billion in stablecoin issuance before the federal threshold matters more.

That law matters beyond stablecoins. It formalizes a U.S. preference for crypto products that have an identifiable issuer, reserve manager, redemption promise, and supervisory home. From a decentralization standpoint, that is a clear signal: the easiest assets to fit into the American framework are not bearer-native systems with dispersed governance. They are issuer-centric liabilities with regulated balance-sheet discipline. That may be good policy for payments. It is not neutral between centralized and decentralized architectures.

Banking supervision also shifted in 2025. On March 7, 2025, the OCC said national banks and federal savings associations may engage in crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks, while rescinding the earlier supervisory non-objection requirement. On April 24, 2025, the Federal Reserve similarly withdrew prior guidance requiring advance notification or supervisory non-objection for crypto and dollar-token activity.

The SEC, meanwhile, is moving away from pure enforcement improvisation toward a more explicit policy process. The SEC’s Crypto Task Force says it is working to distinguish securities from non-securities, develop tailored disclosure frameworks, and create workable registration paths. That is a meaningful directional change, but it is still an institutional project, not a completed statute.

The SEC staff’s February 27, 2025 statement on meme coins shows both progress and limitation. Staff said the described category of meme coins is not a security, but the same statement also said it has no legal force or effect and does not bind the Commission or courts. U.S. crypto policy is therefore clearer than it was in 2023. It is still not a single rulebook.

Europe has the most complete market-wide crypto rulebook, and that comes with hard operational costs.

The EU is the closest thing the industry has to a full continental crypto code. Under the MiCA framework, the core framework applies from December 30, 2024, while Titles III and IV, which cover asset-referenced tokens and e-money tokens, applied earlier from June 30, 2024. MiCA also gives existing crypto-asset service providers a transitional path that can run until July 1, 2026, unless a member state shortens it.

MiCA’s significance is not just that it exists. It standardizes disclosures, authorizations, prudential requirements, governance obligations, market-abuse rules, and consumer-facing conduct across the bloc. That reduces legal fragmentation and improves passportable market access. It also raises fixed compliance costs. Smaller exchanges, token issuers, and infrastructure providers now need legal, compliance, risk, custody, audit, and reporting capacity that looks far closer to financial services than startup culture.

The EU did not stop at market licensing. Regulation (EU) 2023/1113 extends transfer-traceability requirements to crypto-assets, effectively importing the Travel Rule into the EU perimeter. Person-to-person transfers without a CASP stay outside that rule, but once a CASP is involved, the system becomes much more traceable and much less cypherpunk.

From a decentralization lens, Europe is honest about what it is doing. It is not pretending that “community governance” is a substitute for accountable control. If a token, service, or issuer has meaningful discretionary power, MiCA tries to pin responsibility to it. The trade-off is straightforward. Europe offers one of the cleanest paths to regulated market access in the world, but the price is organizational formalization and far less room for ambiguity about who is really in charge.

Asia offers the clearest contrast: China bans the market, while Hong Kong and Japan license it tightly.

Mainland China remains the cleanest example of prohibition. The People’s Bank of China’s notice on virtual-currency trading and speculation says virtual currencies do not have the same legal status as legal tender and frames related business activity as illegal financial activity. China’s mining crackdown was then reinforced through separate restrictions on mining projects.

Hong Kong took the opposite route. Under the SFC regime, centralized virtual-asset trading platforms carrying on business in Hong Kong, or actively marketing to Hong Kong investors, must be licensed and regulated. Hong Kong then added a stablecoin perimeter. The government announced that the Stablecoins Ordinance would commence on August 1, 2025, and the HKMA’s current page states that there is no licensed stablecoin issuer yet.

Japan is permissive, but formal. The FSA’s crypto-asset and stablecoin framework requires service providers targeting residents in Japan to register as crypto-asset exchange service providers. It also separates stablecoins into a different legal bucket rather than pretending all tokens are functionally interchangeable. That distinction matters because it ties regulatory treatment to redemption structure and intermediary responsibility, not to generic “blockchain” branding.

The Asian lesson is blunt. There is no single “Asia model.” There is prohibition, supervised openness, and category-specific licensing. But all three models share one trait: they care far more about operational control than about ideological decentralization. If teams claim their token economy is decentralized while a small multisig can rewrite supply, redirect treasury flows, or whitelist counterparties, Asian regulators are unlikely to treat that as meaningful dispersion of power.

The UK and Gulf hubs are building access through licensure, conduct rules, and reputational filtering.

The UK is no longer treating crypto as a side issue. The FCA already requires many cryptoasset businesses to register for AML supervision, and the UK’s financial-promotion regime brought qualifying cryptoassets into scope from October 2023. That means distribution is itself regulated, even before the full future activity regime is fully live.

HM Treasury then moved the wider framework forward in 2025. The government said in April 2025 that it would legislate for a regulatory regime covering exchanges, dealers, agents, and custody, and later published draft legislation and policy notes. The UK model is therefore evolving from AML registration toward a fuller conduct-and-perimeter regime inside ordinary financial-services machinery.

In the Gulf, Dubai’s VARA and Abu Dhabi’s ADGM are often marketed as crypto-friendly. That is only partly true. They are better described as licensing-forward. VARA’s 2023 regulations set out a dedicated activity framework for virtual assets in Dubai, while ADGM amended its digital-asset regulatory framework in 2025 to streamline asset acceptance and refine capital requirements and fees. These are not anti-regulation jurisdictions. They are specialized regulatory jurisdictions.

The consequence is important for founders and token issuers. Dubai and ADGM can reduce uncertainty for firms willing to accept licensing discipline, physical presence, and ongoing supervision. They do not solve the deeper problem of how to regulate credibly decentralized protocols with no stable control center. They simply make the centralized edge cleaner.

The next phase is global coordination, and that will punish vague decentralization claims.

International standard setters are pushing the same direction. FATF continues to tighten AML expectations around VASPs and Travel Rule implementation. IOSCO has issued policy recommendations for crypto and digital-asset markets built around conflicts, market integrity, custody, and operational risk. The FSB’s implementation work keeps pressing for a global regulatory framework for crypto-asset activities and stablecoins.

That creates a practical design rule for Web3 teams. If governance power is concentrated, regulators will eventually find it. If validator power is concentrated, sophisticated counterparties will eventually measure it. If treasury control depends on a small signer set, “progressive decentralization” is not a defense unless the milestones are concrete, dated, and enforceable. In token economy design, the burden is shifting from narrative to proof: signer dispersion, quorum thresholds, timelocks, validator concentration, upgrade constraints, reserve attestations, redemption mechanics, and actual voting power distribution.

This is where tokenomics stops being marketing and becomes institutional architecture. For teams building public networks, the question is no longer just whether a token can launch. The harder question is whether the control structure implied by the token can survive securities analysis, payments regulation, exchange due diligence, and AML review without revealing that the system is centrally governed after all. For FinDaS Tokenomics, that is the useful intersection between tokenomics consulting and regulation: designing a token economy that does not make decentralization claims the system cannot evidence.

The global direction is now clear. Regulation is expanding. Market access is becoming more permissioned. Compliance costs are rising. Cross-border coordination is improving, but unevenly. And the systems most likely to keep access are the ones that can either prove real authority dispersion or openly accept their status as supervised intermediaries. The middle category, where teams market decentralization while retaining concentrated control, is the one facing the most pressure.