Cryptocurrency regulation is a complex issue with global implications. Governments are developing regulatory systems that support innovation and consumer safety. Some of these systems include defining when a cryptocurrency is considered a security or a commodity, expanding oversight, and improving AML and KYC compliance. Other efforts are focused on establishing stablecoin regulation. Stablecoins are different from cryptocurrencies because they maintain a stable value by linking them to an asset. Congress is considering two major bills, the revised STABLE Act and the GENIUS Act, to create a legal framework for stablecoins.
Some countries regulate cryptocurrencies more strictly than others. For example, Bangladesh bans all use, trade, and possession of cryptocurrencies due to risks of money laundering and financial system instability. Other countries, like South Africa, support forward-thinking approaches to cryptocurrency regulation. The country’s Reserve Bank explains that regulated platforms are permitted to sell digital assets, and it implements strict Know Your Customer standards and anti-money laundering regulations.
In the United States, the federal government oversees crypto activities through various agencies, including the SEC, CFTC, and FinCEN. Each agency focuses on specific aspects of crypto regulation, such as securities and commodities laws, AML compliance, and taxation. Some state governments, such as New York, regulate crypto businesses through the BitLicense, which requires registration, licenses, and compliance.
In the European Union, the Markets in Crypto-Assets Regulation (MiCA) outlines the industry’s first comprehensive set of rules. It covers everything from trading venues to wallets to stability tokens, and it establishes high standards for protecting investors’ assets. It also defines when MiCA rules apply, and it helps clear up questions about the role of regulators.