Global Crypto Assets Regulatory Landscape: Coexistence of Convergence and Differentiation

In recent years, with the rapid development of the encryption market, countries around the world have strengthened their regulation of Crypto Assets. From the ongoing battles between the U.S. SEC and crypto companies, to the comprehensive rollout of the EU's MiCA legislation, and the difficult balancing act of emerging economies between innovation and risk, the global landscape of crypto regulation has displayed unprecedented complexity and diversity. This article will unfold the world map of crypto regulation, exploring the hidden threads beneath this global regulatory wave.

Asia

Hong Kong, China

Hong Kong aims to consolidate its status as an international financial center by actively embracing Web3 and virtual assets. Hong Kong regards Crypto Assets as "virtual assets" rather than currency, regulated by the Securities and Futures Commission (SFC). The revised Anti-Money Laundering Ordinance in 2023 requires Crypto Assets exchanges to obtain licenses. The SFC is responsible for issuing licenses, and several institutions have already obtained licenses or are in the application process. Licensed exchanges are allowed to serve retail investors, and Bitcoin and Ethereum ETFs have also been listed in Hong Kong in 2024.

Taiwan, China

Taiwan adopts a cautious attitude towards Crypto Assets, not recognizing their status as currency, but regulating them as speculative digital commodities. The Financial Supervisory Commission (FSC) is the main regulatory body responsible for overseeing businesses such as the issuance of security tokens (STO). The FSC is drafting specialized legislation for virtual asset service providers (VASP), aiming to shift from a basic registration framework to a comprehensive licensing system.

China Mainland

Mainland China has全面禁止交易和相关金融活动 for Crypto Assets. The People's Bank of China believes that crypto assets disrupt the financial system and facilitate criminal activities. However, in judicial practice, virtual coins are considered to have property attributes and have received a certain degree of legal protection in both civil and criminal fields.

Singapore

Singapore regards Crypto Assets as "payment instruments/goods", regulated by the Monetary Authority of Singapore ( MAS ). Singapore implements a licensed issuance system, requiring stablecoin issuers to maintain a 1:1 reserve. MAS typically issues three types of licenses to crypto businesses: currency exchange, standard payment, and major payment institutions. The recently effective DTSP regulations may impact the offshore operations of crypto projects and exchanges.

South Korea

South Korea regards Crypto Assets as "legal assets", but not as legal tender. South Korea implements a real-name system for exchange licensing, and several major exchanges have already obtained licenses. The draft of the "Basic Law on Digital Assets" (DABA) is currently advancing, aiming to require transparency in stablecoin reserves. The South Korean market is primarily dominated by local exchanges, and foreign exchanges are prohibited from directly servicing South Korean residents.

Japan

Japan is one of the first countries in the world to clearly recognize the legal status of Crypto Assets. Crypto Assets are recognized as "legal means of payment" and are regulated by the Financial Services Agency (FSA) (. Japan implements a strict banking/trust monopoly system for stablecoins, requiring them to be pegged to the yen and redeemable. The FSA is responsible for issuing exchange licenses, and currently, there are 45 licensed institutions. The Japanese market is mainly dominated by domestic exchanges.

Europe

) EU

The EU has established a unified regulatory framework through the "Crypto Assets Market Regulation Act" ### MiCA (. MiCA defines Crypto Assets as "legal payment instruments, but not legal tender." The act imposes strict regulations on stablecoins, requiring them to have a 1:1 fiat currency peg and sufficient reserves. MiCA adopts a "one license, valid everywhere" model, significantly simplifying the compliance process.

) United Kingdom

The UK chose an independent yet comprehensive regulatory path after Brexit. Crypto Assets are regarded as "personal property". The UK has incorporated crypto assets into the regulatory framework by amending the Financial Services and Markets Bill. The Financial Conduct Authority ###FCA( is responsible for issuing the relevant licenses. The UK takes a prudent regulatory approach to stablecoins, requiring them to obtain FCA approval.

) Switzerland

Switzerland is at the forefront of Crypto Assets regulation, known for its flexible token classification method and support for blockchain innovation. The Swiss Financial Market Supervisory Authority ###FINMA( classifies Crypto Assets based on their economic and practical use, mainly divided into payment tokens, utility tokens, and asset tokens. FINMA is responsible for issuing VASP licenses.

America

) United States

The regulatory landscape for Crypto Assets in the United States shows significant interstate differences and a lack of unified federal legislation. The U.S. Securities and Exchange Commission ###SEC( mainly regulates tokens based on securities laws. Each state has also enacted its own Crypto Assets legislation, such as New York's BitLicense program. Major Crypto Assets trading platforms operate in compliance in the U.S., but some international exchanges choose not to enter the U.S. market or only offer limited services.

) El Salvador

El Salvador once recognized Bitcoin as legal tender, but later abandoned this position due to pressure from the International Monetary Fund ###IMF(. Currently, Bitcoin is not legally considered legal tender, but its private use is still allowed. The country has enacted the "Digital Assets Issuance Law," and the National Digital Assets Commission )NCDA( is responsible for regulation.

) Argentina

Argentina allows the use and trading of Crypto Assets, but does not regard them as legal tender. The country enacted a law in 2024 to incorporate virtual asset service providers ###VASP( into its legal and financial framework. VASPs must register with the financial regulator Comisión Nacional de Valores)CNV( to provide encryption services.

Middle East

) United Arab Emirates

The UAE has taken a proactive approach to Crypto Assets and blockchain technology. The Dubai Financial Services Authority ###DFSA( defines crypto tokens as a digital representation of value, rights, or obligations secured by encryption. The main regulatory bodies in the UAE include the Central Bank )CBUAE(, the Securities and Commodities Authority )SCA(, and the Virtual Assets Regulatory Authority )VARA(, among others. VARA has introduced several updates, including strengthening margin trading controls and regulating token distribution.

) Saudi Arabia

Saudi Arabia has taken a cautious stance towards Crypto Assets. The banking system completely prohibits the use of Crypto Assets, and financial institutions are also banned from engaging in Crypto Assets trading. The Saudi Arabian Monetary Authority ###SAMA( and the Capital Market Authority )CMA( emphasize a "cautious approach" to innovation in Crypto Assets. The CMA announced that regulations for the issuance of security tokens )STO( will be released by the end of 2022.

) Bahrain

Bahrain is a pioneer in the regulation of Crypto Assets and blockchain in the Middle East. The Bahrain Central Bank ###CBB( has established a comprehensive regulatory framework through the "Crypto Assets Module" )CRA(. Services involving regulated Crypto Assets within Bahrain require a CBB Crypto Assets license, covering order processing, trading, and other services.

) Israel

Israel does not have comprehensive laws specifically for Crypto Assets, and for tax purposes, Crypto Assets are viewed as assets rather than currency. The Securities Authority ###ISA( regulates activities related to Crypto Assets securities, allowing non-bank members to provide Crypto services. The Capital Markets Authority )CMA( requires virtual currency brokers and custodians to be licensed. The Bank of Israel is researching "digital shekel" and has launched tests.

Africa

) Nigeria

Nigeria's Crypto Assets regulatory landscape has undergone significant changes. The Central Bank ###CBN( lifted restrictions on Crypto Assets in December 2023, allowing banks to provide services to Crypto Assets companies licensed by the Securities and Exchange Commission )SEC(. The SEC's Digital Assets Rulebook provides statutory support for regulating VASPs.

) South Africa

South Africa has declared crypto assets as "financial products" rather than currency. The Financial Sector Conduct Authority ###FSCA( is the main regulatory body for crypto service providers. The licensing process for crypto asset service providers )CASP( began in June 2023. CASPs are officially listed as responsible entities under the Financial Intelligence Centre Act )FICA( and must comply with strict anti-money laundering and customer due diligence requirements.

Summary

The global regulatory landscape for Crypto Assets is undergoing continuous evolution, showing a clear coexistence of convergence and differentiation. Convergence is mainly reflected in the widespread consensus on Anti-Money Laundering ) AML ( and Combating the Financing of Terrorism ) CFT (, as well as the tendency of regulatory agencies to classify based on the functions and economic substance of Crypto Assets. Differentiation is mainly reflected in the significant differences in legal characterization of Crypto Assets among countries.

The main challenges currently facing global Crypto Assets regulation include difficulties in cross-jurisdictional coordination, the speed of technological development outpacing regulation, and the ongoing struggle to balance innovation and risk. In the future, global Crypto Assets regulation will continue to evolve towards a more mature and refined direction, but its inherent complexity and dynamism, along with the differences in national conditions, will continue to be an important backdrop for the development of the global crypto market.