The cryptocurrency market is inherently global due to its decentralised nature, but regional regulatory frameworks still govern its use and trade around the world. As it is still a developing market that makes the most of rapidly changing technology, regulations must be flexible enough to move with developments.
The start of 2025 saw cryptocurrency in one of the best positions it has been in for some time. The culmination of greater global acceptance by businesses and consumers, technological developments, and a suitable political climate saw some cryptocurrencies, including Bitcoin, enjoy record growth and reach new high values.
As with any bull market, this has seen greater interest and opportunity for investors and an increase in the development of new projects hoping to make the most of the market confidence.
A new crypto presale can generate a lot of interest and excitement, as every newly launched coin is yet to stand the test of the market; if you appear on time, you might add a valuable new asset to your portfolio; and 2025 could be a great year for developers and investors who back new projects with potential.
However, it is worth noting that regulatory change is coming which should help to create a more stable market with clarity for everyone involved. As regulations can change based on different regions, it could impact how a new project approaches the market and how tradable it will become.
The UK Becoming a Crypto Trailblazer
In late 2024, the UK government confirmed its intention to go ahead with HM Treasury’s crypto regulation proposals. This came as a relief for those seeking clarity with the paper initially being published in October 2023.
The purpose of the paper was to focus on the second phase of cryptocurrency regulation which relates to the extension of the existing regulatory framework for traditional investments to include cryptoassets. This would help to create a regime for public offers and potential market abuse in the cryptoasset sphere.
There were initial plans to carry out two phases which would see the regulation of stablecoins come first before the broader phase was implemented, but this now appears to be going through as a single phase. The government has also moved against the addition of stable coins into the existing UK payment regulations at present.
The Treasury is also set to clarify that staking services won’t constitute collective investment schemes in all cases.
The FCA (Financial Conduct Authority) has set a timescale of early 2025 to enter discussion with firms regarding draft legislation.
A DP is expected over Q1 or Q2 that will cover the rules concerning trading platforms, lending rules, prudential considerations, staking, and intermediation. A similar timeframe is expected for a consultation paper that will explore stablecoins.
Q3 should see a consultation paper covering firm standards and conduct for Regulated Activities Orders as well as market abuse, admissions, and disclosures.
Q4 leading into Q1 of 2026 will see a consultation paper covering lending, staking, intermediation, and trading platforms with the publication of all final rules set to be published in 2026.
The US Starting a New Era
The US crypto industry is set for massive changes in 2025 with the incoming Trump administration keen to position the country as the world’s crypto capital. This is in contrast to how the Biden administration approached crypto, with several moves impacting how businesses could operate.
The Federal Deposit Insurance Corporation has been accused of implementing restrictions on crypto firms by advising traditional banking services to hold off from allowing crypto-asset services in a move that has been dubbed “Operation Chokepoint 2.0”.
Trump positioned himself as an ally to the crypto industry during his election campaign and looks set to follow through with promises by creating new crypto and tech-related roles in the White House.
Discussions are being held to create an advisory council dedicated to prioritising the crypto industry. David Sacks has also been named in the first crypto role of the White House, AI and Crypto czar.
Sacks history in investment and spending time as the PayPal COO will serve him well in this new role, and the crypto marketplace has been buoyed by his appointment.
The advisory role will work in conjunction with Congress in dealing with AI and crypto concerns. The position underlines the intention to follow through on campaign pledges that will help the crypto industry progress in the US.
The planned removal of SEC chair Gary Gensler is no longer relevant following his decision to retire in 2025. Under Gensler, the SEC has failed to issue crypto-specific rules and he was quoted as saying crypto was a “speculative volatile asset” and that it was being used for “illicit activity”.
The new administration also intends to create a Bitcoin reserve, and the possibility of extending that to other US-based cryptocurrencies is also on the table. The intention to push a US-first narrative in terms of crypto is great news for US projects.
The implementation of new crypto-related roles in government will help to create the regulatory framework and clarity the country needs to lead the global crypto market.
Another pledge to eliminate capital gains tax on Bitcoin transactions could also have a massive impact on crypto adoption and trade in the country.
The EU Joining the Regulated Crypto World
The European Union’s crypto industry is governed by the Markets in Crypto-Assets Regulation (MiCA). The regulation creates uniform market rules for all 27 member states of the EU and is designed to cover cryptocurrencies and other digital assets that are not already covered by the legislation.
The regulations cover every aspect of the crypto market including disclosure, transparency, supervision, and authorisation for operators who issue and trade crypto-assets.
The act was fully implemented in December 2024 and has provided a comprehensive framework that will benefit the European crypto market. Crypto firms no longer have to negotiate a myriad of complicated regulations across different nations.
By providing overarching regulations that stretch across the union, investors can enjoy greater protection and the risk of crypto assets being misused will be reduced.
All crypto-asset service providers must comply with MiCA regulations, including crypto exchanges, custodial wallets, portfolio managers, advising firms, trading platforms, and ART or EMT users.
Member states will designate their own agencies to implement the law, and the ESMA (European Securities and Markets Authority) and EBA (European Banking Authority) will also oversee enforcement.
Businesses will now be able to operate across member states with few license requirements or individual country licenses. However, this does not mean CASPs will have less accountability and they will have more disclosures and obligations.
While businesses will no longer have to go through individual processes for every country’s market they enter, they will have to follow a comprehensive set of rules.
Some key elements of the MiCA regulations include having a minimum of one company director who is a resident of an EU country as well as an office in an EU country.
Businesses will be tasked with implementing stringent AML (anti-money laundering) rules and adhering to data security policies.
Businesses will be obligated to follow informational activity and marketing communication rules fairly without misleading consumers. They will also have to adopt pre-defined practices that aim to prevent market abuse and allow complaints to be handled correctly.
Above all, MiCA compliance requires businesses to act in the best interest of their clients in a fair, professional, and honest way. They must also display transparency by sharing fee policies, costs, and pricing, as well as providing relevant information about their activities with an environmental impact.
Binance has already altered procedures for deposits and withdrawals in Poland to comply with MiCA regulations. The changes will require users to provide more information for transactions that exceed €1,000.
These transactions will now require users to provide the crypto exchange, country, and sender or recipient’s full name.
Under the MiCA, algorithmic stablecoins will be outlawed as they are not defined as asset-referenced tokens. Only asset-back stablecoin options will be available under the new regulations, with strict regulations controlling their activity.
While the implementation of these rules came into action at the end of December 2024, a date of July 2026 has been set for general compliance by CASPs.
This means that CASPs have roughly 18 months to secure the appropriate licenses from their national authority, implement the required security protocols, and adhere to the high standards set out by the regulatory framework.
Asia Remains a Dynamic Market
The Asian crypto market is another strong force with varying regulations based on location. Singapore’s Monetary Authority of Singapore has provided a comprehensive set of guidelines that has seen the country emerge as a leading hub for the crypto industry.
Businesses must undergo a rigorous licensing process that covers risk assessment capabilities, AML procedures, and ensuring applicants have the right criteria.
South Korea has begun discussions regarding mandates to improve current legislation by improving transparency and accountability. It is believed these amendments could be implemented as early as the second half of 2025.
Japan already has a well-regulated crypto industry that includes registration with the Financial Services Agency and compliance with the self-regulatory body the Japan Virtual and Crypto Assets Exchange Association.
India and China are still some way off having a regulated crypto industry. China’s strict stance remains much the same while delays in an Indian bill are holding the country back.
