Cryptocurrency regulation is still highly fragmented worldwide.
Of 75 major economies studied, 45 fully permit crypto activity, 20 impose partial bans, and 10 enforce near-total bans.
Notably, 12 of the 19 G20 members (representing over 57% of global GDP) allow crypto in full, and all G20 countries are considering regulation.
Even so, only a minority have comprehensive frameworks; for example, just 8 of 25 major markets have full rules that cover AML, plus consumer and market protections.
To complicate things, high crypto adoption often persists even where bans exist.
In practice, global crypto firms have to navigate a patchwork of regimes, from permissive “crypto hubs” to outright prohibitions, that vary sharply in scope and strictness.
In light of this, today’s article aims to map out regional approaches and outline the 2025 compliance baseline – ultimately pointing to promising jurisdictions to keep on your watch list.
Major Jurisdictional Approaches
Now, about that map of regional approaches. Let’s break it down region by region.
United States and Canada
The U.S. doesn’t have a single crypto law; rules come from federal agencies and the states.
The SEC, CFTC, and FinCEN each assert authority depending on whether an asset looks like a security, a commodity, or money.
The SEC has pursued some tokens as unregistered securities, while state regimes vary widely (for example, Wyoming’s permissive approach vs New York’s BitLicense).
In 2025, Congress passed the GENIUS Act, defining “digital commodities” and “payment tokens,” clarifying SEC/CFTC roles, and creating limited safe harbours for certain stablecoins.
Firms serving U.S. customers typically register with FinCEN (often as money transmitters) and meet both federal and state AML/KYC rules.
Canada has treated crypto dealers as money services businesses since 2014, requiring FINTRAC registration and AML compliance, and has issued fines for breaches (Binance received a C$6m penalty in May 2024).
European Union (EU)
The EU is pursuing a single rulebook under MiCA (adopted 2023; phasing in 2024-26). Issuers, exchanges, wallets, and other providers must be authorised and meet transparency and consumer-protection standards.
MiCA classifies tokens (utility, asset-referenced, e-money), requires issuer whitepapers and stablecoin reserves, and imposes prudential, governance, and disclosure obligations on service providers.
There’s a transition period (existing firms can operate under national rules until mid-2026) so requirements still differ by member state in the short term.
In parallel, EU AML measures and oversight by the European Banking Authority bring FATF-aligned KYC/AML expectations to crypto firms.
United Kingdom
The UK is finalising a bespoke regime.
HM Treasury has set out plans to bring a broad range of crypto activities (exchanges, brokers, and stablecoins) within regulation.
The FCA already treats crypto firms as obligated entities for AML/KYC and restricts retail promotions without clear warnings.
Draft laws (expected 2025–26) will extend the financial-services perimeter to cover crypto trading, stablecoin issuance, and custody. Under the proposals, UK crypto firms will need FCA authorisation and must meet familiar standards on transparency, consumer protection, and operational resilience.
Separately, the Bank of England and FCA have consulted on ensuring payment-use stablecoins are fully backed and regulated similarly to e-money.
The direction is comprehensive by 2026, but the transition means a temporary patchwork of guidance and consultations.
Asia-Pacific
The region is the most split.
China maintains a strict ban on private crypto trading and mining and permits only the state’s digital yuan.
Hong Kong has moved in the opposite direction, launching licensing for intermediaries and, from 1 August 2025, a stablecoin ordinance positioning it among the first to regulate fiat-backed stablecoins.
Japan has regulated since 2017: exchanges must be licensed, segregate client assets, and meet capital/custody rules; in 2025, JPYC became the first licensed yen-pegged stablecoin backed by Japanese government bonds.
Singapore’s Payment Services Act requires licences for “digital payment token” services (exchange, custody, transfer) with strict AML and technology standards. It’s a demanding but clear regime that appeals to institutional players.
South Korea, Australia, and New Zealand also operate licensing or registration frameworks (e.g., Korea’s Virtual Asset Act). Elsewhere, India applies heavy taxation (30% on gains and 1% TDS) without a full market framework, while Vietnam and Bangladesh effectively prohibit private crypto use.
Middle East and Africa
A fresh wave of lawmaking is underway in the Middle East and Africa.
The UAE explicitly aims to be a hub: Dubai’s VARA and Abu Dhabi’s ADGM have detailed frameworks licensing exchanges, custodians, and token issuers under bespoke rules.
Bahrain licenses VASPs under its own regime. Others are catching up: Qatar’s Financial Centre introduced token regulations in 2024 (authorising certain “investment tokens”), and Saudi Arabia has signalled interest with joint CBDC and innovation projects alongside the UAE.
Across Africa, approaches diverge. Nigeria and Morocco largely prohibit crypto transactions, while South Africa and Mauritius are building regimes that cover taxation, licensing, and AML to permit crypto businesses.
Many developing economies in MENA and Africa are moving toward structured rules as part of broader fintech strategies.
Latin America
The picture is mixed. El Salvador adopted Bitcoin as legal tender in 2021, attracting attention but maintaining limited ongoing consumer/exchange oversight.
Brazil leads on lawmaking: its 2022 Virtual Assets Law requires registration and AML compliance, with implementing rules for VASP licensing, stablecoin issuance limits, and FX use proposed in late 2024 and expected in 2025.
Mexico and Argentina apply AML/tax rules without a unified market law. Several Caribbean centres (Cayman, Bermuda, Bahamas) offer crypto-friendly licensing and no local taxes, drawing offshore funds and payment ventures.
Global Requirements for Crypto Businesses (2025)
Across jurisdictions, crypto firms face a broadly similar compliance baseline, with local variations layered on top. Let’s go through the essentials.
Licensing and Registration
Most countries now require exchanges, wallet providers, token issuers, or payment processors to obtain a licence or register.
The EU’s MiCA mandates authorisation for all crypto-asset service providers; Singapore’s Payment Services Act issues “Major Payment Institution” licences for digital-payment-token services; Japan and Hong Kong require exchange licences; and the UK is bringing crypto within FSMA.
In the U.S., firms typically register with FinCEN as money services businesses (and with the SEC as broker-dealers if they deal in securities). Practically, it means structuring entities to secure the right licence in each target market.
AML/CFT and KYC
Stringent anti-money-laundering rules apply almost everywhere.
Firms need customer due diligence, ongoing monitoring, suspicious-activity reporting, and controls to prevent terrorist financing.
Crucially, most major markets now enforce the FATF Travel Rule (sharing originator and/or beneficiary data above set thresholds). By 2025, about 85 countries (roughly 73% of those surveyed) have enacted Travel Rule laws, up from 65 in 2024. Meeting these obligations means adapting bank-grade processes to blockchain flows.
Customer Protection and Transparency
Regulators expect clear risk disclosures and sensible limits on retail exposure.
MiCA requires detailed whitepapers for publicly offered assets. Some markets curb marketing to the general public (Singapore) or require suitability checks and per-investor exposure limits (Hong Kong).
Client assets are often mandated to be held in bankruptcy-remote custody (e.g., cold storage) separate from firm funds, and some regimes (particularly in APAC) require insurance cover or minimum cold-storage ratios.
Prudential safeguards. Many jurisdictions impose capital and reserve requirements. Stablecoin issuers in the EU (and, soon, in the UK) must hold segregated fiat reserves backing each token.
Trading platforms may face minimum net-worth or escrow requirements (for example, under New York’s BitLicense or MAS rules). Cybersecurity expectations are rising too: independent audits, robust key management, change control, and incident response are becoming standard. Data-protection and payments rules (e.g., GDPR in Europe) can also apply.
Reporting and Tax Compliance
Obligations continue to tighten.
The U.S., UK, and many EU states require reporting of large transactions and capital gains. As of 2025, 27 EU countries oblige platforms to report user transaction data. Several markets levy crypto-specific taxes (for example, India and Turkey). Global operators need integrated tax and regulatory reporting baked into their systems.
So, what does this all mean in practice?
Operating globally is a heavy lift: you’ve got universal standards (licensing, AML/KYC, the Travel Rule, disclosures, custody segregation) plus local wrinkles (marketing rules, capital buffers, data-sharing formats, tax).
As national regimes mature, expect more cross-border frictions (and a stronger push toward coordination), so it pays to build to a high, portable baseline and localise only where rules truly diverge.
Promising Crypto Hubs and Trends
Despite the fragmentation, a handful of jurisdictions stand out for clear rules, improving access to banking, and a generally supportive stance toward innovation.
Switzerland and Liechtenstein: Zug’s “Crypto Valley” and Liechtenstein’s token-specific framework offer mature, predictable regulation and strong links to banking. Both remain magnets for token projects, security tokens, and crypto VC.
Singapore: The Payment Services Act provides a well-defined licensing path. It’s rigorous on AML/tech standards, but political stability, rule of law, and regional connectivity make Singapore a prime base for institutional platforms.
United Arab Emirates: Dubai (VARA) and Abu Dhabi (ADGM) now license most virtual-asset activities under bespoke rulebooks. Government support (regulatory sandboxes, public initiatives) and better access to local banking have helped build a fast-growing ecosystem that bridges East and West.
Hong Kong: With an exchange licensing regime in place and a stablecoin law effective from 1 August 2025, Hong Kong is positioning itself as Asia’s gateway (particularly attractive for fiat-backed stablecoin issuers).
Select emerging markets:
- Brazil is rolling out one of Latin America’s more complete regimes for VASPs and stablecoins.
- Turkey and South Korea are moving toward clearer exchange and token-sale rules.
- El Salvador’s bitcoin policy continues to attract mining and remittance activity.
- In Africa, Mauritius and South Africa are building licensing frameworks, while Kenya explores blockchain use in banking.
- Several Caribbean centres (Cayman, Bermuda, Bahamas) maintain crypto-friendly licensing that draws offshore funds and payments ventures.
Broadly, markets that pair rising adoption with a willingness to legislate (rather than ban) look most promising.
The Bigger Picture (August 2025)
In this article, we mapped how the major jurisdictions regulate crypto today (US/Canada, EU, UK, Asia-Pacific, Middle East and Africa, Latin America), distilled a 2025 compliance baseline, and highlighted hubs where rules are clearest and improving fastest.
The landscape still ranges from outright bans to unified rulebooks, and only a minority of markets offer end-to-end coverage across tax, AML, consumer protection, and licensing.
Yet, common threads are settling in: FATF-aligned AML/KYC (including the Travel Rule), stricter oversight of stablecoins, segregation of client assets, and closer links to traditional finance via CBDCs and tokenised securities.
Why this matters is practical.
Building to a high, portable standard (licensing, disclosures, custody segregation, security controls) lets teams scale across borders and localise only where rules genuinely diverge (token classification, DeFi treatment, custody models, stablecoin specifics).
On current trajectories, clarity and execution will keep Singapore, Switzerland/Liechtenstein, the UAE, and Hong Kong in the lead, while other markets converge with tailored regimes.
