The world’s top economies are getting ready to receive proposals for how to proceed, but because the United States is dragging its feet on establishing clear regulations for cryptocurrencies, European nations are now in charge of determining global legislation.
The Financial Stability Board (FSB) is scheduled to reveal new ideas on global crypto regulation on Wednesday or Thursday. These plans might influence how the Group of 20 nations approaches decentralised finance by updating current regulations or developing whole new ones. Although it has solid examples from Europe, Congress’ reluctance to approve laws explicitly outlining rules for the domestic cryptocurrency market may frustrate the U.S. Treasury’s ambition of leading the growth of digital assets.
Since July, the FSB has been formulating proposals for how the G-20 nations—which include the European Union and 19 sizable industrial and developing nations—should govern cryptocurrency. Its recommendations, which were made to the central bankers and finance officials in the group, included regulations for digital currencies, stablecoins, and businesses that provide services to the emerging financial sector.
While several G-20 nations currently have clear regulations in place, the United States has not passed any crypto legislation, leaving it up to regulatory bodies to determine what is permitted under present laws.
According to Gilbert Verdian, CEO of QuantQNT, a blockchain-based financial technology startup in London, “you’ve got forward-thinking jurisdictions like Europe and Switzerland, for example, who are extremely clear on different sorts of crypto assets.” And since 2017, they have been transparent. And more recently, the EU has passed MiCA, which essentially defines what a crypto asset is and what a crypto asset service provider must do in order to enter the market, provide services to consumers and businesses, and sell to them. He believes it requires the United States to essentially play catch-up.
The European Council passed the Markets in Cryptoassets Regulation (MICA) on October 5. The restrictions, which became operative in 2024, generally protected investors at the expense of decentralisation and privacy.
The situation in the EU contrasts with that in the United States, where two bills that would codify cryptocurrency regulation seem to be bogged down in Congress and where regulations are made by the Securities and Exchange Commission and the Commodities Futures Trading Commission, which are competing with one another for oversight clout.
Jeremy Sheridan, vice president of regulatory relations at crypto custodian PrimeTrust in Las Vegas, asserts that there are insufficient regulatory standards and a lack of government adoption. And if we don’t similarly adopt regulatory frameworks here in this country, he thinks that’s going to be very, very limiting for the U.S. from a standpoint of economy, but even from an innovation standpoint, from a development standpoint, from a standpoint of education, he thinks everything is going to continue to move internationally.
The issue undermines American efforts to set the standard for crypto regulation. In a statement released in July, the Treasury stated that it intended to reinforce U.S. leadership in the global financial system and in technical and economic competitiveness, particularly via the prudent development of payment technologies and digital assets.
Sheridan believes that the FSB plans should not include the new, particularly harsh European regulations for stablecoins. He believes stablecoins need to keep their decentralised and authentic nature,” and expresses worry that the FSB will advocate for “too much control” that would prevent “free-market forces” from “entering into play for stablecoins.
In light of the passing of the MiCA, Mairead McGuinness, the EU’s commissioner for financial services, met with Democratic junior senator Kirsten Gillibrand of New York and Republican congressman Patrick McHenry of North Carolina on Tuesday to urge them to pursue legislation for U.S. crypto.
The Foreign Exchange Act and the Act on the Prevention of Transfer of Criminal Proceeds have both been updated in Japan to reflect changes to the country’s cryptocurrency regulations. To prevent criminals from utilising cryptocurrency exchanges to launder money, adjustments were introduced. The legislation will impose fines on exchanges that fail to disclose consumers’ names and addresses while completing transactions.
According to Verdian, “the transition of money is already underway, and this only occurs every 30 to 40 years when the financial system has the chance to develop into something that will be useful for the following 30 to 40 years. It really is transformative to have intelligence embedded into traditional assets like money and securities as well as into digital assets like securities.
