Part I of Beyond Uncertainty introduced the concept of regulatory clarity and its significance for crypto’s future. It also examined the role of international standard-setters in catalyzing a global shift from ambiguity to structured engagement.

Part II now turns to the crucial question of implementation: how is regulatory clarity being pursued? The answer is unfolding jurisdiction by jurisdiction, revealed through evolving patterns and regulatory nuance.

Introduction

The crypto ecosystem has evolved from a niche innovation to a global financial force, prompting regulators to actively define boundaries to protect consumers, ensure market stability, and prevent financial crimes. Key areas are now taking shape under formal oversight. Stablecoin issuance is being addressed with reserve and transparency requirements[i], custody solutions face stricter safeguarding rules[ii], and trading platforms[iii] must comply with market integrity and investor protection standards. Additional frameworks are emerging around tokenized assets with ongoing discussions on DeFi, reflecting a maturing industry that demands proactive, not just reactive, policymaking.

While the pace of progress varies, this concerted shift reflects a broader recognition of crypto’s staying power and the necessity for balanced oversight. The result is an evolving, if uneven, regulatory landscape designed to foster stability without sacrificing the dynamism of crypto assets.

This article maps the global terrain of these regulatory responses, highlighting how select jurisdictions are constructing clarity. While no single blueprint has emerged, the contours of regulatory engagement are becoming more visible, marked by experimentation[iv], convergence[v], and strategic divergence[vi].

A Note on this Series

This article offers a jurisdictional scan on crypto regulation across ten select jurisdictions. Readers seeking a high-level synthesis of global trends and the priorities shaping regulatory developments may refer to the Jurisdictional Overview table below and the thematic conclusions in Part B.

Part A: Jurisdictional Approaches to Regulatory Clarity

The following jurisdictional snapshots illustrate how clarity is being constructed across diverse legal systems, each reflecting distinct priorities, frameworks, and pacing.

European Union

In the EU, the implementation of the Markets in Crypto-Assets (MiCA) regulation is well underway[vii]. MiCA replaces the fragmented patchwork of national rules across the EU with a unified EU-wide framework for crypto-assets and the oversight of crypto related activities. It mandates licensing for crypto asset service providers, establishes transparency requirements for token issuers, and introduces robust rules for stablecoins[viii] to safeguard consumers and financial stability. The regulation is designed to facilitate legal certainty, investor protection, financial stability and market integrity to the rapidly growing crypto sector across EU member states. This harmonization facilitates the streamlining of cross-border operations and enables innovation within a defined and predictable legal environment.

Complementing MiCA, the EU has also adopted the eighth amendment to the Directive on Administrative Cooperation (DAC8)[ix], which expands tax transparency to cover crypto assets. DAC8 introduces automatic exchange of information between tax authorities, requiring crypto-asset service providers to report user transactions in line with the OECD’s Crypto-Asset Reporting Framework (CARF). Reporting obligations are expected to take effect in 2026. Together, MiCA and DAC8 reflect the EU’s strategic commitment to regulatory clarity through the harmonization of crypto asset regulation and fiscal oversight.

While the EU’s ambitious framework provides unparalleled transparency across its members, its complexity may pose a significant compliance challenge for certain participants. Nevertheless, the EU’s strategy demonstrates a concerted effort to balance innovation with accountability and a measure of legal certainty. 

United States

After years of evolving approaches, the United States is now taking deliberate steps to establish a clearer framework for crypto oversight. One that seeks to balance structure, transparency, and support for innovation. It joins a growing list of countries seeking to bring oversight and stability to the rapidly expanding crypto asset ecosystem[x].

This shift is most evident in the GENIUS[xi] Act, now law[xii], which regulates fiat-backed stablecoins through rigorous reserve[xiii], disclosure[xiv], and audit requirements setting a precedent for institutional trust[xv]. The Act aims to foster innovation by establishing a federal framework that encourages responsible crypto development while safeguarding consumer interests.

Alongside this, the proposed CLARITY Act[xvi]establishes a comprehensive regulatory framework for digital assets by assigning oversight based on functional characteristics: the Securities Exchange Commission (SEC) for securities[xvii] and the Commodities Futures Trading Commission (CFTC) for digital commodities[xviii]. It protects self-custody rights[xix], excludes DeFi from SEC regulation (while upholding anti-fraud provisions)[xx], and requires the two agencies to coordinate on joint definitions.

The Act also introduces strong custodial standards for digital asset custodians[xxi], a safe harbor for decentralizing projects, and mandates studies on DeFi, NFTs, and digital asset misuse to guide future policymaking[xxii].

Further advancing the narrative is the comprehensive report released on 30 July 2025 by the White House Working Group on Digital Asset Markets[xxiii]. The report promotes regulatory clarity through clear definitions of digital asset categories and solidification of oversight boundaries between the SEC and CFTC. It strongly supports the stablecoin framework (the GENIUS Act) and pushes for the integration of decentralized finance into mainstream banking infrastructure. The Report calls for the facilitation of banking access for crypto firms and the clarification of permissible bank activities in custody, tokenization, stablecoin issuance, and the use of blockchains[xxiv]. It also recommends safe harbors, regulatory sandboxes, and no-action relief to foster innovation. Notably, it proposes the creation of a U.S. Strategic Bitcoin Reserve and Digital Asset Stockpile to leverage forfeited assets as economic and strategic tools, while emphasizing updates to AML laws to guard against illicit finance.

As these legislative initiatives move forward, the world watches closely, anticipating whether they will deliver the balance of innovation, protection, and certainty that the industry so urgently seeks.

Singapore

Singapore continues to refine its crypto regulatory framework[xxv], prioritizing transparency, investor protection, and financial stability. Under the Payment Services Act[xxvi], the Monetary Authority of Singapore (MAS) has progressively broadened oversight[xxvii] to include digital payment token transfers, custodial services, and stablecoin issuance, all subject to stricter compliance and consumer safeguards. The August 2023 stablecoin regulations[xxviii] further clarified requirements for single currency stablecoins, mandating reserve backing, redemption guarantees, and disclosure transparency. Additionally, the Financial Services and Markets Act[xxix], effective June 2025, extends MAS’ jurisdiction to Singapore-based crypto firms operating overseas, introducing targeted licensing and risk management rules to address cross-border regulatory gaps[xxx]. 

Rather than constructing an entirely new regulatory architecture, MAS has chosen to deliberately extend and adapt its well-established financial laws to encompass crypto assets. Singapore’s model of incremental integration stands in clear contrast to jurisdictions building comprehensive new regimes from the ground up. Such divergence reflects the essence of the global regulatory patchwork in motion, and it remains to be seen whether these approaches will eventually converge, or if each will prove uniquely suited to its respective economic and institutional context.

United Arab Emirates

The UAE has built a comprehensive and multi-layered regulatory framework for crypto assets, offering clarity across federal, emirate-level[xxxi], and free zone jurisdictions[xxxii]. This structure enables coordinated oversight while balancing innovation with robust regulation.

At the federal level, UAE Central Bank regulates virtual assets[xxxiii] used for payments[xxxiv] including fiat-backed stablecoins and stored value facilities[xxxv]. The Securities and Commodities Authority (SCA) oversees investment related virtual assets[xxxvi], handling licensing, supervising, and compliance enforcement for tokenized securities, commodities, etc, with a mandate to safeguard investor rights and ensure market integrity[xxxvii]. Through Cabinet Resolution No. 112/2022[xxxviii], the SCA delegated licensing authority to Dubai’s Virtual Assets Regulatory Authority (VARA) which now governs Virtual Asset Service Providers (VASPs) operating within onshore Dubai. VARA’s 2023 Virtual Asset Framework[xxxix] sets out detailed operational and compliance standards, and licensed entities are automatically registered with the SCA, reinforcing regulatory cohesion.

Within the UAE’s financial free zones, the Abu Dhabi Global Market (ADGM) operates under the FSRA's[xl] pioneering 2018 framework[xli] regulating exchanges[xlii], custodians, brokers and intermediaries with strong emphasis on AML, custody, and technology governance[xliii]. In 2024, ADGM issued Consultation Paper No. 11 to refine its approach to asset acceptance, capital requirements, and staking[xliv]. Dubai International Financial Centre (DIFC) maintains its own regime via the Dubai Financial Services Authority (DFSA); while Ras Al Khaimah’s RAK DAO introduced the DAO Association Regime (DARe) in 2024[xlv], enabling DAOs to incorporate as Companies Limited by Guarantee providing legal personality, limited liability, and contractual capacity.

Since Cabinet Resolution No. 111 of 2022, all onshore virtual asset activities require explicit approval from either the SCA or local regulators[xlvi], eliminating jurisdictional ambiguity. The framework maintains transparency through clearly defined boundaries between federal, emirate, and free zone authorities; standardized licensing; the SCA’s coordination role across jurisdictions; and the Central Bank’s AML enforcement for fiat transactions[xlvii]. Recently, the SCA and VARA formalized a strategic partnership to unify regulatory oversight, enabling mutual licence recognition, joint supervision, and real-time data sharing[xlviii].

Crucially, the UAE’s regulatory clarity is not static. Authorities continuously refine their frameworks to address market evolution while maintaining transparency. The FSRA regularly updates its standards[xlix], VARA refines its rulebooks[l], and the SCA ensures federal alignment[li]. Together, these mechanisms foster investor/consumer protection, regulatory cohesion, and market confidence.

United Kingdom

The UK has adopted a phased approach to crypto regulation[lii], initially prioritizing AML compliance[liii] (including mandatory registration for crypto firms), financial promotions[liv], and consumer protection[lv]. As markets matured, and global regulatory approaches have evolved, the UK has refined its stance, resulting in the proposal of a regulatory framework[lvi] under the 2025 Statutory Instrument[lvii]. While this deliberate pace aims to ensure stability and thoroughness, it has also prolonged a period of operational uncertainty for some industry participants awaiting final rules.

The proposed regime will bring crypto asset exchanges, dealers, and intermediaries within the regulatory perimeter of the Financial Services and Markets Act 2000, imposing authorization requirements and direct oversight[lviii]. Key focus of regulators will be market conduct regulation, consumer protection, maintaining market integrity across crypto asset activities[lix], as well as mitigating systemic risks and prudential standards for authorized firms engaged in crypto asset markets[lx]. A key challenge will be balancing these stringent requirements with the goal of fostering innovation, ensuring that compliance costs do not inadvertently hinder competition and market entry.

In furtherance of this proposed regime, the FCA published a discussion paper on Regulating Crypto Asset Activities[lxi]; while continuing to operate its Digital Sandbox[lxii] which supports innovative firms in launching new products and services under controlled conditions. Moreover, the FCA’s recent lift of its 2021 ban on crypto exchange traded notes (cETNs) for retail investors (effective October 2025) reflects growing confidence in the maturity of the market and the ability of regulatory safeguards to mitigate consumer risk [lxiii].

The expansion of retail access and the creation of a robust compliance framework for institutional players marks a significant move toward greater regulatory clarity. This evolving approach helps participants understand their obligations more confidently and consistently, addressing longstanding uncertainties in the crypto sector and paving the way for a more transparent, trustworthy industry.

Hong Kong

Hong Kong has taken deliberate steps to clarify its regulatory approach to crypto assets, aiming to foster a secure and mature market environment. Oversight is divided between key financial authorities: the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA), with overarching policy guidance from the Financial Services and Treasury Bureau.

The SFC regulates Virtual Asset Trading Platforms (VATPs)[lxiv], including those dealing in security-like tokens under the Securities and Futures Ordinance. It also administers a licensing regime under anti-money laundering laws for platforms handling non-security tokens, pursuant to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO)[lxv]. Licensed platforms are subject to strict custody requirements[lxvi], including segregation of client assets, cold storage protocols, and independent audits. In August 2025, the SFC issued a circular[lxvii] setting out minimum custody standards for VATPs and offering good practices to mitigate risks in wallet infrastructure, transaction workflows, and key management.

The Hong Kong Monetary Authority (HKMA) oversees fiat-referenced stablecoin issuers[lxviii], and advises on certain prudential regulatory expectations[lxix] for virtual asset-related activities conducted by authorized institutions[lxx].

A significant development in Hong Kong’s regulatory landscape has been the recent implementation of the Stablecoin Ordinance (2025), which establishes a licensing regime for fiat-referenced stablecoin issuers, administered by the HKMA. Issuers must maintain full reserve backing with high-quality liquid assets[lxxi], meet minimum capital requirements of HKD 25 million, and guarantee same-day redemptions at par value. The regime includes retail investor protections[lxxii] and mandates compliance with AML/CFT standards, regular audits, and transparent disclosures.

In February 2025, the SFC introduced the ASPIRe[lxxiii] initiative, a strategic roadmap comprising twelve targeted measures aimed at strengthening market infrastructure, enhancing investor protection, and deepening institutional engagement. A central pillar of ASPIRe is streamlining market entry through regulatory clarity. Key proposals include licensing regimes for OTC trading and custody providers, strengthened insurance and compensation frameworks, improved investor education and disclosure protocols, and the regulation of crypto influencers to ensure responsible promotion. In June 2025, the SFC published public consultation papers proposing to expand Hong Kong’s virtual asset regulatory regime to cover virtual asset dealing[lxxiv] and custodian services[lxxv].

Hong Kong’s approach is characterized by its methodical and layered expansion of regulatory clarity. Rather than a single sweeping act, it is building its framework deliberately, first with VATP licensing, then stablecoins, and now OTC and custody, demonstrating a phased strategy to de-risk the ecosystem. The ultimate goal of this meticulous approach is to provide the market predictability and legal certainty required to attract sustainable investment and foster serious innovation. Whether this measured strategy will translate into global leadership remains to be seen, but its commitment to clarity and structure is unmistakable. As the framework matures, its ability to accommodate emerging technologies and cross-border dynamics will be key to its long-term influence.

South Korea

South Korea’s crypto regulatory framework has matured significantly, moving further towards[lxxvi] a proactive, integrated model[lxxvii]. Under Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), the jurisdiction has constructed a system that balances robust consumer protection with a pathway for institutional adoption and innovation. However, this rapid regulatory expansion presents notable implementation challenges. Market participants, particularly small and medium-sized exchanges, have faced steep compliance costs and operational complexities in adapting to the regime.

The regime is anchored by key statutes including, the Act on Reporting and Use of Specified Financial Transaction Information[lxxviii], which enforces AML/CFT compliance and operationalizes the FATF Travel Rule, and the Virtual Asset User Protection Act (VAUPA), which came into force on July 19, 2024[lxxix]. VAUPA establishes a comprehensive regime for non-security tokens, codifying investor safeguards such as mandatory cold wallet storage[lxxx], segregation of customer funds, liability insurance requirements, and prohibitions against market manipulation and insider trading in virtual asset markets. Violations may trigger criminal penalties, including imprisonment and fines up to five times the amount of illicit gains.

A strategic priority in 2025 has been the structured onboarding of institutional capital. The FSC introduced a phased roadmap to lift prior restrictions, enabling listed firms and institutional investors to gain conditional market access[lxxxi]. This shift underpins the anticipated approval of spot crypto ETFs and the emergence of a regulated security token offering (STO) ecosystem[lxxxii], signaling a maturation from a retail-dominated market to a diversified financial landscape. Concurrently, regulators have preemptively suspended new crypto lending services pending formal leverage guidelines[lxxxiii] and launched a proposed bill to establish a stringent licensing framework for KRW-pegged stablecoins, developed in consultation with the Bank of Korea. This framework requires stablecoin issuers to maintain full reserve backing in bankruptcy-remote accounts and undergo periodic third-party audits[lxxxiv].

The next evolutionary leap is the proposed Digital Asset Basic Act (DABA), introduced in June 2025. This overarching legislation[lxxxv], aims to unify the crypto asset ecosystem under a single statutory framework, creating a cohesive regime that moves beyond VAUPA’s focus on user protection. It introduces a categorized licensing regime (authorization, registration, notification) for service providers, including exchanges, custodians, wallet managers, and advisors. A centralized Korea Digital Asset Industry Association will oversee token listings and market surveillance, replacing the previous exchange-led process managed by the Digital Asset Exchange Alliance. This shift is designed to eliminate conflicts of interest and enhance listing transparency. Most significantly, DABA mandates a statutory issuance report for primary market disclosures, replacing voluntary whitepapers and legally aligning digital asset offerings with traditional capital markets. This reform would effectively lift the government’s 2017 ban on initial coin offerings (ICOs) and establish clear liability for misleading disclosures[lxxxvi].

Despite its breadth and ambition, the framework still grapples with defining its boundaries around emerging domains like decentralized finance (DeFi) and non-fungible tokens (NFTs), which do not neatly fit into existing regulatory categories[lxxxvii]. Critics caution that, in its pursuit of rigor, the regime risks cultivating an overly restrictive environment that may dampen the permissionless innovation intrinsic to the digital asset ecosystem.

Yet South Korea’s approach could arguably be deemed to be more than a jurisdictional pathway. Proponents consider it to be a deliberate, high-stakes experiment, an attempt to engineer a transparent, full-spectrum financial architecture. Designed to address the complexities of digital assets with rigor and institutional clarity, the framework fuses traditional financial principles with structured oversight. In doing so, the country aims to reconcile innovation with accountability at scale. The ultimate measure of success for this architecture will be its ability to adapt, foster responsible innovation, promote market dynamism, and enhance global competitiveness.

Japan

With a legacy of early adoption and steady refinement, Japan’s crypto regulatory regime reflects a function-based architecture[lxxxviii] rather than a single omnibus law[lxxxix]. The Payment Services Act (PSA) [xc] serves as the primary statute governing crypto-asset exchange service providers (CAESPs), setting requirements for licensing, asset segregation, information security management, advertising conduct, user protection, and AML/CFT compliance[xci]. Beyond the PSA, the regulatory perimeter includes other key statutes: the Financial Instruments and Exchange Act (FIEA)[xcii], the Banking Act and Trust Business Act[xciii], and the Act on Prevention of Transfer of Criminal Proceeds for overarching AML/CFT measures[xciv]. This structure creates a targeted, multi-layered system designed to address the specific risks of each crypto-related activity.

Building on this foundation, the FSA has proposed and refined a dual classification for crypto assets, beginning with an April 2025 discussion paper[xcv] and further elaborated in a September 2025 working group report[xcvi]. The proposed framework distinguishes Type 1 assets, used for fundraising or business activities, which may be subject to stricter issuer-level disclosure and operational requirements under FIEA, from Type 2 assets, such as Bitcoin and Ethereum, where exchange operators are responsible for providing accurate information to users. While not yet formalized, this evolving classification signals a shift toward aligning investment-like tokens with securities treatment, while preserving flexibility for non-investment assets.

Under Japan’s stablecoin regime, only licensed banks, fund transfer service providers, and trust companies may issue fiat backed stablecoins[xcvii]within the jurisdiction.

Japan’s regulatory recalibration also extends to taxation. A government-backed proposal aims to replace the current progressive tax rate, capped at approximately 55%, with a flat 20% capital gains tax on crypto income by 2026[xcviii]. Requests have also been made to introduce loss carry-forward provisions and align crypto taxation with equities, enhancing market competitiveness and encouraging broader investor participation.

Despite its regulatory maturity, Japan continues to confront challenges. Past high-profile hacks and ongoing illicit solicitation by unregistered operators have prompted the FSA to enhance deterrence mechanisms and tighten oversight of investment advisory practices. Current priorities include strengthening consumer protection enforcement.

Ultimately, Japan’s regime reflects a deliberate balance between promoting innovation, evident in its support for Web3 while ensuring market accountability. With clear licensing pathways and ongoing legislative refinement, Japan continues play a formative role in shaping regulatory clarity across the Asia-Pacific region.

Cayman Islands

The Cayman Islands is executing a deliberate, phased strategy to evolve its bespoke virtual asset regulatory framework from foundational anti-money laundering controls into a sophisticated, full-scale registration and licensing regime. The implementation of Phase 2 in April 2025 marked a pivotal shift, introducing formal licensing for trading platform operators and custodians[xcix] under the supervision of the Cayman Islands Monetary Authority (CIMA). This move empowers CIMA with expanded supervisory tools and imposes prudential standards, decisively aligning the jurisdiction with Financial Action Task Force recommendations and global regulatory expectations. These enhancements are reinforced by regulatory measures such as the Rule and Statement of Guidance[c], which collectively set out minimum expectations for governance, risk management, cybersecurity, client protection, and other operational standards across custodial and trading activities.

Concurrently, proposed legislation reflects Cayman’s nuanced grasp of its evolving market structure. The Virtual Asset (Service Providers) (Amendment) Bill, 2025 introduces a targeted exemption for tokenized investment funds, streamlining registration obligations for entities already regulated under the Mutual Funds Act or Private Funds Act[ci]. This strategic carve-out reduces regulatory friction for core market participants and delivers explicit legal certainty around the tokenization of traditional financial products. In doing so, it reinforces Cayman’s standing as a premier jurisdiction for investment fund administration while signaling its intent to accommodate innovation without compromising oversight.

Building on this, the government is considering further amendments to key Acts to address tokenization, with a focus on: (a) clear definitions for tokenized funds and their issued tokens; (b) operational requirements; (c) investor protections; and (d) the enhancement of the CIMA’s supervisory powers.

Beyond domestic refinement, Cayman is cementing its commitment to international tax transparency. Its pledge to implement the OECD’s Crypto-Asset Reporting Framework (CARF) by 2027[cii] will enable automatic exchange of information on a wide range of crypto transactions, including previously opaque areas such as DeFi and peer-to-peer trades. Public consultation is underway to integrate CARF into domestic legislation, ensuring alignment with global reporting standards.

This evolving framework is not developed in a vacuum; it is a direct response to the jurisdiction's booming niche in DAO formations, tokenized funds, and DeFi protocols. The popularity of its foundation company structure for decentralized governance underscores this synergy between innovative law and technological experimentation.

As Phase 3 looms, the Cayman Islands is not merely adopting global norms but is actively tailoring them. The ultimate ambition is clear: to solidify its position as a secure, compliant, and sophisticated offshore hub that offers innovators regulatory clarity without stifling the flexibility that attracts cutting-edge ventures in the first place. This represents a calculated bid to be the nexus where global standards meet crypto-native innovation.

Bahamas

The Bahamas has established a comprehensive regulatory framework for digital assets through its Digital Assets and Registered Exchanges (DARE) Act[ciii], providing a clear and structured pathway to the licensing and supervision of and structured pathway for the licensing and supervision of Digital Asset Businesses. Building on the foundation laid by the DARE Act of 2020, the 2024 amendments reflect a deliberate evolution in the jurisdiction’s approach, designed to meet the demands of a rapidly changing digital asset ecosystem[civ]. The framework now encompasses, inter alia, exchanges, custodians, advisory services, portfolio managers, and staking providers, all under the oversight of the Securities Commission of The Bahamas (SCB).

The DARE Act’s 2024 refinements significantly broaden its scope, by introducing specific licensing categories for emerging activities such as staking and digital asset derivatives, enhancing predictability for operators. These updates reinforce existing rules for custody and issuance, mandating stricter client asset protection, fit-and-proper standards for issuers, and robust cybersecurity controls. A detailed disclosure regime for staking services has been introduced, alongside a clear regulatory framework for stablecoins that outlines registration requirements, acceptable reserve assets, and standards for custody, segregation, reporting, and redemption. Notably, the Act expressly prohibits algorithmic stablecoins, applying lessons from notable market instabilities in the recent past, and empowers the SCB to designate new activities, embedding flexibility into the regulatory architecture[cv].

A key challenge for the SCB remains balancing this rapid regulatory expansion with the institutional capacity for sustained and effective supervision. As the framework grows more complex, continued investment in technical expertise and enforcement infrastructure will be essential to maintain the clarity and credibility the regime is designed to offer.

Further bolstering its global credibility, the Bahamas has formally committed to implementing the OECD’s Crypto-Asset Reporting Framework (CARF), undertaking first exchanges by 2028[cvi]. This proactive stance on tax transparency provides long-term certainty regarding reporting obligations and places the jurisdiction in alignment with emerging global standards.

Taken together, The Bahamas’ strategy reflects a deliberate effort to use legislative precision to attract compliant businesses. Its success hinges on cultivating a credible, well-regulated hub that offers crypto-native ventures both the legitimacy of a comprehensive framework and the operational clarity needed to scale with confidence.

Jurisdictional Overview Table: Key Focus Areas & Regulatory Models

Part B: Cross-Cutting Observations

As jurisdictions continue to shape their crypto regulatory frameworks, several cross-cutting themes have emerged, revealing not just isolated efforts, but a broader movement toward intentional oversight. Although the expression of these clarity signals varies among legal systems, they consistently demonstrate shared priorities and developing best practices closely aligned with the fundamental principles of investor protection, market integrity, and financial stability established by international standard-setters. These principles are no longer aspirational, they are actively shaping the tone, structure, and scope of emerging regulatory frameworks

Licensing and Registration: A clear trend has emerged toward formal licensing and registration. Through modular rulebooks, tiered structures, or strict operational standards, regulators are defining who can operate legally and under what conditions. This shift transforms informal participation into structured market access, enabling supervision, enhancing accountability, and signaling legitimacy.

Token Classification and Legal Taxonomies: Jurisdictions are increasingly attempting to define crypto assets with greater precision, though the terminology and structure vary widely. From MiCA’s multi-tiered taxonomy to bespoke classifications in other regimes, regulators are developing function-based definitions to support enforcement, disclosure, and consumer protection. Yet these efforts remain jurisdiction-specific, with terms like virtual assets, digital assets, and crypto assets used inconsistently across legal systems. This lack of harmonization arguably poses challenges for cross-border interoperability and regulatory clarity.

Stablecoin Oversight: Oversight of fiat-backed tokens has become a policy priority. Many jurisdictions have acknowledged their systemic implications and are introducing reserve requirements, redemption rights, and governance standards. These rules reflect a growing understanding that regulatory clarity must extend to payment instruments and monetary stability.

Supervisory Innovation and Coordination: Regulatory sandboxes, innovation hubs, and multi-agency task forces are being deployed to engage with emerging technologies, test new models, and build institutional capacity. These mechanisms signal a shift from reactive enforcement to proactive engagement.

Custody and Trading Activities: Regulatory focus has solidified around custody and trading as critical domains for ensuring market integrity. Jurisdictions are implementing standards for asset segregation, auditability, and operational resilience for custodians, alongside rules for market surveillance, asset safeguards, and listing transparency for trading platforms. This collective effort formalizes market participation, anchoring innovation within a framework of accountability and investor protection.

DeFi and Protocol-Level Compliance: Jurisdictions are beginning to grapple with decentralized finance and the regulatory implications of protocol-level architecture. While approaches vary, there is a shared recognition that clarity must eventually extend beyond intermediaries to the underlying infrastructure.

Taken together, these observations suggest that while regulatory clarity may be uneven, it is no longer incidental. Jurisdictions are not merely reacting to crypto’s rise, they are actively constructing the legal infrastructure that will define its future. Slowly but deliberately, they are laying the building blocks of a de facto global baseline, one that demands registration/licensing, accountability, and financial integrity from market participants but offers a clearer path forward; one where innovation is guided, risks are managed, and legal certainty becomes the norm.

Conclusion

Crypto regulation is no longer a theoretical exercise, it is being built, tested, and refined in real time. Jurisdictions around the world have become laboratories for regulatory clarity, experimenting with frameworks that reflect their unique priorities, capacities, and philosophies. Some are leading with comprehensive legislation, others with targeted reforms or supervisory innovation. All are contributing to a global shift from ambiguity to intentional design. Across these jurisdictions, one thing is clear: there is a decisive move toward structured oversight and the deliberate definition of the regulatory perimeter.

This process remains inherently iterative. Clarity is not a static endpoint, but a dynamic architecture, one that must evolve with technology, market behavior, and public expectations. Each jurisdiction offers lessons in what works, what doesn’t, and what remains unresolved.

To succeed, regulatory frameworks must adopt a proportionate, risk-based posture, one that remains flexible and responsive to the rapid evolution of crypto markets. This means embedding adaptive mechanisms, such as structured optionality through tiered, phased, or conditional pathways; iterative feedback loops with industry; and built-in triggers that respond to market shifts, to allow for coherent recalibration over time. Regulation must not only reflect today’s realities, but be capable of evolving alongside innovation, behavior, and risk.

Yet this proliferation of national experiments, while creating clarity within borders, risks producing a tangled web of conflicting rules across them. Fragmentation is the next great challenge. The path from this patchwork of progress to a cohesive global system is the central dilemma that remains, how to preserve jurisdictional nuance while enabling interoperability, consistency, and trust across markets.

Part III: Regulatory Clarity in Motion- Challenges, Priorities, and the Path Ahead will examine the structural tensions that persist across the global landscape. From taxonomy gaps to cross-border friction, Part III will explore what must be addressed to move from patchwork to progress and how regulators, innovators, and educators can work together to build a resilient, inclusive, and trusted digital future.

References

[i] Regulators across jurisdictions are setting clearer standards for stablecoin design, transparency, and backing — helping to separate credible issuers from those posing systemic risks. These rules offer a defined compliance path and build user and investor confidence in using stablecoins for payments, remittances, and on-chain finance.

[ii] Regulatory clarity around custody is driving standards for asset segregation, auditability, and operational resilience. These measures protect consumers from potential losses and reinforce market integrity. By requiring licensed custodians to follow rigorous protocols, regulators are reducing the risks associated with holding digital assets at scale.

[iii] Regulatory standards for exchanges and broker-dealers are steadily taking shape, addressing AML, market surveillance, asset protection, and listing transparency. This shift is reshaping trading venues and fostering fair, efficient markets without stifling innovation through uncertainty or uneven enforcement.

[iv] Experimentation refers to the diverse pilot programs, sandbox regimes, and bespoke licensing models being tested across jurisdictions. These initiatives allow regulators to explore tailored oversight mechanisms before formal adoption especially in emerging areas like DeFi, tokenization, and digital asset custody.

[v] Convergence signals the growing alignment around core regulatory principles, such as anti-money laundering (AML) standards, stablecoin reserve requirements, and consumer protection norms.

[vi] Strategic divergence is the deliberate differences in regulatory posture across jurisdictions. While some regions pursue comprehensive frameworks, others rely on enforcement-led approaches, or innovation-first models. These divergences reflect each jurisdiction’s unique market maturity, risk appetite, and geopolitical priorities.

[vii] See summary update of implementation by Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

[viii] Including the requirement to maintain full reserve backing and adhere to rigorous transparency and risk management protocols. MiCA’s classification of crypto assets includes two types of stablecoins. Namely (a) Asset referenced tokens which are crypto assets backed by reserve assets comprised of fiat, various commodities and/or several crypto assets, to maintain a stable value and (b) Electronic money tokens are crypto assets backed by a single fiat currency to maintain the asset’s stability.

[ix] It is noted that there is a DAC9 albeit not directly relevant to the regulation of crypto assets. DAC9, adopted in 2024, introduces a centralized top-up tax information return for multinational enterprise groups under the EU’s Pillar Two Directive. While not directly related to crypto-assets, it reflects the EU’s broader push toward harmonized tax reporting and automated data exchange across jurisdictions.

[x] https://www.weforum.org/stories/2025/07/stablecoin-regulation-genius-act/

[xi] Generating Enhanced National Investments and Uplifting Standards

[xii] Signed into law 18 July 2025. The GENIUS Act takes effect on the earlier of 18 months post-enactment or 120 days after final regulations are issued by primary federal stablecoin regulators. The Act directs agencies , including the OCC, Federal Reserve, FDIC, NCUA, and Treasury, to issue implementing rules within one year, by July 18, 2026.

[xiii] Stablecoin issuers must hold 1:1 reserves for any stablecoins issued. These reserves can be held in physical currency, US treasury bills, repurchase agreements and other low-risk assets approved by regulators that are segregated and unencumbered.

[xiv] requires issuers to make monthly, public disclosures of the composition of reserves.

[xv] “The Act requires 100% reserve backing in U.S. Dollar or short term government-backed assets, monthly disclosures, requires issuers to become regulated by federal or state regulators (based on size), and implements anti-money laundering (AML) and know-your-customer (KYC) requirements”: Update on 2025 U.S. Stablecoin Legislation | Womble Bond Dickinson - JDSupra

[xvi] Digital Asset Market Structure Clarity Act of 2025

[xvii] identified via the Howey Test

[xviii] The Act also introduces new registration regimes for digital commodity brokers, dealers, and exchanges under CFTC authority, and grants the SEC anti-fraud authority over stablecoins and certain digital commodities.

[xix] Individuals have the right to use hardware and software wallets for lawful personal custody and peer-to-peer transactions, as long as the counterparty isn’t a financial institution and the assets aren’t subject to U.S. sanctions. This right applies only to personal use, not to custodial or fiduciary activity on behalf of others.

[xx] Section 309 exempts certain decentralized finance activities related to the operation and maintenance of blockchain networks from SEC regulation, including providing incidental services (e.g., computational work), offering user interfaces, or distributing messaging systems from SEC registration. However, these activities remain subject to the SEC’s antifraud and anti-manipulation enforcement powers

[xxi] See summary of key provisions here.

[xxii] See article ‘Congress set to Bring CLARITY to Digital Asset Market Structure’

[xxiii] https://www.whitehouse.gov/crypto/

[xxiv] See White House Fact Sheet

[xxv] It is noted that provisions of legislation may apply depending on the nature of activities e.g. the Securities and Futures Act. See for example, guide prepared by Charltons Quantum on various aspects of the regulation of Singapore crypto related activities.

[xxvi] And MAS Guidelines.

[xxvii] See key releases: April 2024.

[xxviii] See MAS Release 2023.

[xxix] FSMA was designed to consolidate and enhance Singapore’s financial regulatory framework, including provisions for digital token services.

[xxx] See MAS release here

[xxxi] i.e. the local level

[xxxii] See illustrative table in this Article by Simmons and Simmons.

[xxxiii] And includes coverage of digital wallets, remittance platforms, and stablecoins that facilitate the exchange of goods and services.

[xxxiv] In June 2024, the CBUAE introduced the Payment Token Services Regulation, focusing specifically on AED-backed stablecoins.

[xxxv] The UAE Central Bank’s Stored Value Facilities Regulation provides for the storage of non-cash mediums of exchange that can be purchased, transferred and exchanged for goods and services and expressly includes virtual currencies as virtual assets that customers can purchase, transfer and exchange.

[xxxvi] including tokenized securities, initial coin offerings, and other crypto instruments with investment characteristics

[xxxvii] under Cabinet Decision No. 111 of 2021 which among other things, explicitly outlines requirements for trading, custody, and asset management services. Cabinet Resolution No. 111 of 2022 subsequently operationalized this framework by detailing the licensing procedures, supervisory mechanisms, and enforcement protocols applicable to VASPs across the UAE.

[xxxviii] See here

[xxxix] Access here

[xl] Financial Services Regulatory Authority

[xli] FSRA Regulations & Rules (Crypto Asset Legislative Framework)

[xlii] Under the FSRA's regime, Multilateral Trading Facilities for Virtual Assets are required to meet requirements in relation to market surveillance, settlement, transaction monitoring and recording, transparency and other systems and controls.

[xliii] The framework focuses on key risks, including those relating to market abuse and financial crime, investor protection, technology governance, custody and exchange operations: Digital Asset activities regulated by ADGM.

[xliv] See here

[xlv] https://www.rakdao.com/dare/

[xlvi] See here

[xlvii] Ibid.

[xlviii] See articles by Cointelegraph, Gulf Business, Trading View.

[xlix] to reflect global developments in custody, stablecoins, and technology governance

[l] to address emerging risks and innovations.

[li] through legislative review and stakeholder engagement

[lii] Prior to the 2023, the UK’s approach to crypto assets was focused on the implementation of rules relevant to anti-money laundering and financial promotions, as well as consumer warnings rather than a comprehensive framework.

[liii] https://www.legislation.gov.uk/uksi/2017/692/contents

[liv] https://www.fca.org.uk/publication/policy/ps23-6.pdf

[lv] including, the Consumer Rights Act 2015 and Consumer Protection from Unfair Trading Regulations 2008.

[lvi] for regulating crypto assets under financial services law

[lvii] The draft Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025.

[lviii] The 2025 Statutory Instrument establishes six regulated crypto asset activities: (1) issuing UK-based fiat-backed stablecoins (excluding payments); (2) safeguarding cryptoassets (excluding temporary exchange holdings); (3) operating crypto trading platforms; (4) dealing as principal/agent (including crypto lending); (5) arranging deals (covering lending platforms); and (6) staking (with liquid staking tokens treated as dealing activities). See Policy Note.

[lix] The Financial Conduct Authority will assume responsibility for these areas. See useful note on the 2025 SI with comparative.

[lx] The Prudential Regulation Authority will focus on the latter areas. 

[lxi] https://www.fca.org.uk/publication/discussion/dp25-1.pdf

[lxii] https://www.fca.org.uk/firms/innovation/digital-sandbox

[lxiii] https://www.fca.org.uk/news/press-releases/fca-opens-retail-access-crypto-etns

[lxiv] Since June 2023, all VATPs operating in Hong Kong must obtain an SFC license under AMLO, adhering to strict AML/CFT, KYC, client asset segregation, cybersecurity, and governance requirements. Initially restricted to professional investors (those with at least HKD 8 million in assets), retail access is now permitted under enhanced safeguards.

[lxv] Hong Kong also enforces strict compliance with the FATF Travel Rule, requiring Virtual Asset Trading Platforms to transmit originator and beneficiary information for transactions exceeding HKD 8,000.

[lxvi] See SFC Guidelines

[lxvii] See SFC most recent circular on this.

[lxviii] with additional policy guidance from the Financial Services and Treasury Bureau. The HKMA has also proposed new business conduct requirements (including on anti-money laundering / countering the financing of terrorism (AML/CFT)) for stablecoin issuers and other regulated stablecoin activities.

[lxix] The HKMA’s focus has been on key areas such as prudential supervision, AML/CFT and financial crime risk, and investor protection as it relates to AIs conducting VA related activities.

[lxx] The HKMA has issued circulars and guidance outlining supervisory expectations for banks and other authorized institutions engaging in virtual asset-related activities, including risk management and custody standards and distribution. It has also issued a circular on the Provision of Staking Services for Virtual Assets from Custodial Services.

[lxxi] and the market value of the reserve pool must be equal to the par value of the stablecoins in circulation.

[lxxii] Reserve assets must be segregated, currency-matched, and redeemable at par value within one business day. Only licensed stablecoins can be offered to retail investors, while unlicensed issuers are restricted to professional investors.

[lxxiii] Access, Safeguards, Products, Infrastructure, Relationships framework.

[lxxiv] See SFC consultation paper here.

[lxxv] See here.

[lxxvi] See key updates here.

[lxxvii] “South Korea’s approach, blending pre-existing criminal statutes, anti-money laundering measures, and new, targeted legislation, demonstrates an emerging market’s effort to forge a comprehensive system capable of addressing both domestic market realities and aligning with international norms”: Jon, W., & Yang, W. (2025). Mapping South Korea’s digital asset regulatory landscape: From criminal code to the recently implemented virtual asset user protection act. Computer Law & Security Review- Volume 57, 2025, 106140 https://doi.org/10.1016/j.clsr.2025.106140.

[lxxviii] The legislation provides a regulatory framework for cryptocurrencies and related services and activities, officially legalizing cryptocurrency in South Korea and mandating certain compliance measures. VASPs are obligated, inter alia, to register with the FIU. This registration primarily entails two streams of requirements : ISMS certification and Opening and use of a verified real-name account.

[lxxix] https://www.fsc.go.kr/eng/pr010101/82683. Enacted on July 18, 2023 and effective from July 19, 2024, the VAUPA strengthens protections for virtual asset users and targets unfair trading practices. It requires VASPs to segregate user fiat funds in bank deposits or trusts, and mandates insurance or reserve funds to cover risks like hacking or system failuresSee comprehensive article here.

[lxxx] (minimum 80% of user assets)

[lxxxi] See FSC Press Release.

[lxxxii] See Dentons Legal Update and Outlook July 2025.

[lxxxiii] See articles here and here.

[lxxxiv] Per Dentons legal update.

[lxxxv] also referred to as the “General Act on Digital Assets”.

[lxxxvi] See article by Shin & Kim

[lxxxvii] Jon, W., & Yang, W. (2025). Mapping South Korea’s digital asset regulatory landscape: From criminal code to the recently implemented virtual asset user protection act. Computer Law & Security Review- Volume 57, 2025, 106140 https://doi.org/10.1016/j.clsr.2025.106140.

[lxxxviii] classifying tokens based on their use as payment instruments, investment vehicles, or fundraising tools.

[lxxxix] See article here. 

[xc] first revised in 2017 and then updated in 2020 and 2023

[xci] See here

[xcii] for crypto derivatives and investment-type tokens

[xciii] cover stablecoin issuance- along with the PSA.

[xciv] https://www.fsa.go.jp/en/news/2022/20221207/01.pdf

[xcv] https://www.fsa.go.jp/en/news/2025/20250410_2/01.pdf and https://www.fsa.go.jp/en/news/2025/20250410_2/02.pdf. At the heart of the proposal is a dual framework distinguishing fundraising-oriented tokens from non-fundraising assets. The paper explores whether investment-like tokens should trigger issuer-level disclosure obligations, potentially aligning them with securities under the FIEA.

[xcvi] See here; https://cointelegraph.com/news/japan-crypto-regulation-overhaul-securities-law . The paper notes key challenges to be addressed includes inadequate information disclosure, user protection, addressing unregistered operators, ensuring fair trading, and improving security against hacking.

[xcvii] https://www.fsa.go.jp/inter/etc/20220914-2/02.pdf

[xcviii] See article

[xcix] See CIMA circular.

[c] Rule- Obligations for the provision of virtual asset services - Virtual Asset Custodians and Virtual Asset Trading Platforms. See also Statement of Guidance- Guidance for the provision of virtual asset services -Virtual Asset Custodians and Virtual Asset Trading Platforms.

[ci] See here.

[cii] See here.

[ciii] Link to Act.

[civ] See article.

[cv] See SCB Press Release

[cvi] See here.