How Crypto Regulation is Evolving Around the World

Cryptocurrency regulation is accelerating worldwide as policymakers refine how digital assets are supervised, traded, and integrated into mainstream finance. This revised article streamlines the original content while incorporating key regulatory terms to support SEO.

Overview of global crypto regulation

Global regulators are building a more coherent regulatory framework for cryptocurrency, with notable progress on stablecoins, market structure legislation, and cross‑border standards. In North America, agencies such as the SEC, CFTC, and FinCEN are tightening rules around money laundering, investor protection, and crypto activities, while the Federal Reserve, FDIC, and Treasury focus on financial stability and systemic risk.

In Europe, the EU’s MiCA regulation introduces a harmonised regime for crypto‑assets and stablecoins, creating a single rulebook for financial institutions and crypto businesses operating across member states. Across Asia, markets like Japan and Singapore are refining crypto regulation to support tokenized collateral, compliant trading of virtual assets, and clearer authorization regimes that align with FATF mutual evaluations and travel rule implementation expectations.

As financial institutions deepen their crypto activities, including custody of digital assets, NFTs, and phygital products, regulators are seeking a federal regulatory framework or equivalent national regimes that can support innovation without compromising compliance or asset recovery standards. High‑profile consumer IP platforms and NFT projects like Pudgy Penguins highlight how games, collectibles, and multi‑vertical phygital products can evolve under more mature crypto regulation.

Recent regulatory developments

In the United States, the GENIUS Act has become the core federal regulatory framework for payment stablecoins, defining reserve standards, issuer classifications, and dual federal–state supervision paths for compliant issuers. The act transforms stablecoins into regulated financial products and clarifies how banking‑regulated financial institutions can provide custodial services without treating stablecoins in custody as on‑balance‑sheet liabilities, which supports broader crypto adoption and tokenized collateral usage.

Regulators such as the SEC, CFTC, and FinCEN continue to issue guidance and enforcement actions targeting money laundering, sanctions evasion, and fraud, pushing crypto businesses to upgrade compliance, execution controls, and reporting processes. In parallel, the EU’s full MiCA rollout and related regulatory developments across the UK and other jurisdictions are shifting the emphasis from ad‑hoc enforcement to clear upfront rules for crypto markets and financial products.

These legislative developments and reports from bodies such as the Financial Stability Board and BIS underscore a growing focus on investor protection, market integrity, and financial stability in the treatment of cryptocurrency and stablecoins. Together, they create a more predictable environment for innovative structures involving NFTs, virtual assets in games, and tokenized collateral across multiple asset classes.

United States: stablecoins, approach and agencies

The SEC plays a central role in shaping crypto market structure through its views on which tokens qualify as securities, disclosure expectations, and how broker‑dealers may handle digital assets. Its enforcement actions influence market behaviour and can trigger volatility, but they also push crypto businesses toward stronger compliance programs aligned with FinCEN’s AML rules and OFAC sanctions expectations.

The GENIUS Act complements the SEC’s role by specifying a dedicated federal framework for payment stablecoins and creating a Stablecoin Certification Review Committee that includes the Treasury, Federal Reserve Board (FRB), and FDIC, further integrating stablecoins into the broader federal regulatory framework. This coordination with other regulators, including the OCC and CFPB where consumer and banking laws intersect, is intended to balance innovation with investor protection and consumer safeguards.

FINRA guidance and no‑action letter practices remain relevant for intermediaries that seek clarity on specific crypto activities, while DeFi‑related products may increasingly be evaluated under existing securities and commodities rules. As crypto adoption grows, supervisory capacity and exam programs are expanding across multiple agencies, affecting how exchanges, custodians, and other financial institutions design their crypto activities and compliance controls.

DeFi, tokenization, and market structure

DeFi platforms are under growing scrutiny as regulators work out how existing laws apply to automated market makers, lending protocols, and DAO‑governed services. Authorities are particularly focused on money laundering risks, investor protection gaps, and questions about who is responsible for compliance when governance is decentralised, which has implications for execution quality, asset recovery, and tokenized collateral risk management.

At the same time, tokenization of traditional financial products - such as real estate, funds, and other assets - is gaining momentum as regulatory clarity improves around custody, disclosure, and treatment of tokenized positions on balance sheets. Accounting bodies such as FASB are updating guidance on how companies should recognise and measure crypto holdings and related tokenized instruments, which in turn affects institutional appetite for these structures.

Projects that integrate NFTs, phygital products, and games, including examples like Pudgy Penguins, illustrate how consumer‑facing platforms can evolve within clearer regulation while addressing IP, licensing, and investor protection issues. Over time, crypto regulation is likely to converge around consistent rules for stablecoins, tokenized collateral, and DeFi‑like services, even if there are regional differences in market structure legislation and supervisory intensity.

European Union and MiCA

The Markets in Crypto‑Assets (MiCA) regulation is the EU’s flagship framework for crypto‑assets that are not already covered by existing securities rules, including many utility tokens and certain types of stablecoins. By setting EU‑wide authorisation, conduct, and disclosure requirements for crypto‑asset service providers, MiCA aims to strengthen investor protection, financial stability, and market integrity across the bloc.

Titles III and IV of MiCA introduce specific regimes for asset‑referenced tokens and e‑money tokens, both of which include stablecoin‑like instruments that must comply with stringent reserve, governance, and transparency standards. These rules are particularly relevant for financial institutions and crypto businesses that issue or distribute stablecoins, provide custody of virtual assets, or run trading platforms within the EU.

MiCA interacts with other EU initiatives, such as DORA for ICT risk and AML directives, to form a broader federal‑style regulatory framework within the single market that facilitates passporting and mutual recognition across member states. This environment supports innovation in NFTs, tokenized collateral, and multi‑vertical consumer platforms while embedding robust compliance and risk management expectations.

Asia‑Pacific approaches

Asian jurisdictions exhibit diverse approaches to cryptocurrency and digital assets, ranging from supportive to restrictive. China maintains tight constraints on cryptocurrency trading and mining, driven by concerns over financial stability, capital controls, and money laundering, which has shifted much activity offshore and slowed domestic crypto adoption.

In contrast, countries like Japan, South Korea, Hong Kong, Singapore, and Thailand are building clearer licensing regimes, stablecoin frameworks, and tokenization sandboxes to attract responsible crypto businesses. Japan and Hong Kong, for instance, are refining rules around crypto custody and stablecoin issuance, while Singapore and Australia are tightening AML standards and extending crypto licensing to reduce regulatory arbitrage and improve investor protection.

These regulatory developments are informed by FATF standards, including expectations on travel rule implementation and risk‑based supervision of virtual asset service providers, which push firms to enhance KYC, sanctions screening, and overall compliance. As a result, Asia‑Pacific is emerging as a key region for regulated experimentation in tokenized collateral, games, NFTs, and phygital products that link physical and virtual assets.

Future trends and coordination

Reports from global standard‑setters such as the Financial Stability Board, IOSCO, BIS, and FATF suggest that crypto regulation is entering a phase of more coordinated rule‑setting rather than purely reactive enforcement. These bodies are promoting consistent approaches to stablecoin regimes, cross‑border supervision, and prudential treatment of banks’ crypto exposures, which will influence how FRB, OCC, FDIC, and other national regulators update their rules.

Over time, international coordination on crypto regulation may strengthen through mutual recognition mechanisms, supervisory colleges, and information‑sharing arrangements covering sanctions, money laundering, and asset recovery. This will matter for complex cases such as cross‑jurisdictional hacks, failures of large stablecoin issuers, or insolvencies involving tokenized collateral and NFTs.

For crypto businesses and financial institutions, staying ahead of these regulatory developments will require robust compliance programs, proactive engagement with regulators, and careful monitoring of legislative developments and official reports that shape expectations across multiple jurisdictions. Firms that can align their crypto activities with evolving standards on investor protection, execution quality, and financial stability are best positioned to benefit from the next wave of crypto adoption.