A Guide to Cryptocurrency Regulations Around the World

Written by: Zarema Plaksij

Published November 6, 2025

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From a fringe innovation in late 2000s into a global phenomenon used by millions of people today – cryptocurrency has transformed the world of finance. Today, digital assets, such as crypto, and their trading value on the stock market dominate economics news. In fact, a whopping 562 million people worldwide own cryptocurrency, which constitutes 6.8% of the global population. Yet, most countries still lack dedicated crypto laws and those that do often take very different approaches. 

Governments around the world understand that it’s important to incorporate virtual money into existing legislation, and outline regulations that will help mitigate security risks, protect customers from unpredictable losses, and prevent financial crime, such as fraud and money laundering. To better understand these emerging rules, we’ve created an overview of the most current regulations in the biggest crypto markets.

What Is Cryptocurrency Regulation and Why It Matters

People’s interest in digital currency has been growing for quite some time. This increased demand encouraged many new crypto startups to join the market.

But soaring public interest and rapid market growth did not come without challenges for ordinary clients, regulatory authorities and even governments. 

The main promise of cryptocurrencies’ is anonymity. Although this may sound both attractive and lucrative to many people, authorities worldwide are seriously concerned about the illicit uses of virtual currency, such as money laundering, terrorist financing, and financial fraud. That’s why crypto, just as any other currency, is in need of rigid regulation.

Cryptocurrency regulation refers to the laws and rules that govern how these digital assets are created, traded, taxed, and monitored. It covers a wide range of areas:

• Licensing and supervision of crypto exchanges
• How stablecoins and tokens are issued
• How crypto transactions are taxed
• Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance

The goals of these regulations are to ensure security, transparency, and compliance, and in particular to:

• Protect consumers – Prevent losses from scams, fraud, and exchange failures by requiring secure custody and fraud controls
• Combat crime – Stop crypto’s use in ransomware, black markets, and money laundering through AML rules like the Travel Rule
• Build trust and stability – Clear rules encourage legitimate innovation and attract institutional investors
• Balance innovation and safety – Support blockchain development while preventing harm to users and the financial system

Evidently, without clear rules, fraud risks increase and adoption rates stall. Alternatively, when rules are defined, legitimate businesses can innovate confidently, and institutional investors feel safer entering the crypto space. That’s why effective cryptocurrency regulations can create a balance: supporting innovation while preventing harm to users and the financial system.

Global Crypto Regulation Overview

The approaches to cryptocurrency regulation differ widely around the world – from full licensing and innovation encouragement to total bans to protect financial stability. 

Although the majority of countries permit cryptocurrency trading, some require full licensing of cryptocurrency exchanges and apply securities and commodities laws to crypto assets, others still have light-touch guidelines or remain largely silent, thus creating a gray area.

Cryptocurrency is legal in 45, partially banned in 20, and generally banned in 10, but the number is constantly changing. Source

Such divergence only complicates things for crypto companies, as they need to navigate a maze of country-specific compliance rules. Basically, to do the same business, a crypto exchange will have to abide by different rules and get different licenses in different parts of the world.

Luckily, amid these varied national laws, baseline international standards are gradually emerging. For example, the Financial Action Task Force (FATF), the global AML body, set the universal standard for Anti-Money Laundering (AML), in particular the “Travel Rule” requiring Virtual Asset Service Providers (VASPs) to collect and share customer information. And in mid-2025, 99 jurisdictions had passed or were in the process of passing laws to implement the FATF Travel Rule for crypto transparency.

So, it’s safe to say that the overall trend is toward greater government oversight. 

Global Regulations by Region

Let’s break down crypto regulation in major regions: North America, Europe, Asia-Pacific, Africa, and South America. Each has its own regulatory flavor, from the US’s multi-agency labyrinth to Europe’s new unified rules, to developing frameworks in Africa and Latin America.

North America

The United States does not have a single unified crypto regulator and instead follows a complex multi-agency model. The Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), and Internal Revenue Service (IRS) all have overlapping roles. Additionally, states impose licensing, such as New York’s BitLicense. However, Decentralized Finance (DeFi) operates in a regulatory gray area, awaiting clearer guidance from the Congress.

This means that cryptoexchange businesses in the US are forced to navigate multiple compliance regimes. For example, they must implement KYC/AML programs under FinCEN guidance and also consider whether it needs to register tokens with the SEC.

Further underpinning uncertainty, the US regulators have been actively enforcing existing laws (for instance, suing exchanges for unregistered securities offerings), signaling that even in a gray area, crypto activities are not beyond the reach of traditional financial rules.

Canada is one of the first countries to enact crypto-specific legislation. It regulates crypto assets through FINTRAC by requiring exchange registration and AML compliance. Canadian crypto platforms must register with provincial securities regulators (via CSA/IIROC) and with FINTRAC as money service businesses, requiring full AML/KYC compliance. Exchanges follow strict standards for custody, auditing, and risk disclosure, and risky products like high leverage are restricted.

Canada began requiring AML compliance in 2014, driven by concerns over terrorist financing and investor protection. This means Canadian users benefit from registered, monitored exchanges. For taxes, crypto is treated as property, triggering capital gains on trades. Strict but clear, Canada’s approach helped integrate crypto into existing financial frameworks.

Mexico’s FinTech law, introduced back in 2018, treats crypto assets as virtual assets – not legal tender, but recognized as electronic payments, thus blending consumer protection and finance innovation. Key motivation here is to keep crypto separate from traditional banking. 

In Mexico, banks are prohibited from offering crypto services to customers without authorization (Banxico Circular 4/2019) with the aim to protect the financial system from crypto risks. However, independent crypto exchanges can operate freely without special licenses, following general AML and securities laws on a case-by-case basis.

All this creates a cautious environment: crypto businesses are allowed, but consumers use them at their own risk, and authorities on their end warn that crypto is volatile and not legal tender. As to Mexican regulators, they are exploring stricter licensing requirements but haven’t implemented them yet.

Therefore, Mexico’s approach balances innovation with prudence – acknowledging crypto while keeping traditional finance insulated.

Europe

In 2023, the European Union established the Markets in Crypto-Assets Regulation (MiCA) – a unifying framework that standardizes crypto rules across all 27 EU member states. MiCA enforces licensing, transparency, and consumer protections, as well as provides clear definitions for tokens and stablecoins.

Being a comprehensive crypto law, MiCA is a single rulebook that outlines crypto issuance, service providers, and stablecoins rules. Here are key rules:

• Crypto exchanges and wallet providers need EU authorization (like a financial license)
• Unified standards for consumer protection, transparency, and capital requirements
• “Passporting” allows a license in one EU country to work across all member states

Combined with updated AML directives, i.e. bringing crypto under KYC/AML obligations and the Travel Rule requirements, Europe clearly leads in regulatory clarity. Put simply, Europe’s goal is to boost innovation through legal certainty while preventing regulatory arbitrage.

Let’s consider four examples of European crypto industry regulations. 

In Germany, crypto custody was recognized as a licensed financial service in 2020, requiring BaFin (the German financial regulator) approval to hold customer crypto. In other words, any company that wants to hold or manage crypto on behalf of customers in Germany must obtain a BaFin crypto-custody license, just as it would for traditional financial services.

Cryptocurrencies in Germany are classified as “financial instruments”, bringing exchanges and brokers under regulation. Crypto businesses follow strict KYC/AML rules, and gains are taxed like stocks. In 2023, Germany extended these rules under MiCA and the Future Financing Act to support regulated crypto innovation.

France‘s 2019 PACTE law created Digital Asset Service Providers (DASPs), requiring registration with AMF and compliance with AML/KYC and cybersecurity rules. About 50 DASPs registered by 2023, including major crypto exchanges. France regulates Initial Coin Offerings (ICOs) and requires risk warnings on crypto ads. With MiCA, new entrants need full authorization, while existing DASPs can transition until 2026. Therefore, France’s strict, structured approach has made it a European crypto hub.

Although no longer in the EU, the United Kingdom has been developing its own crypto regulations in parallel. Today, the country requires all crypto exchanges and wallets to register with the Financial Conduct Authority (FCA) for AML purposes. For example, in 2023 the FCA had approved around 42 companies and rejected or prompted the withdrawal of dozens of others, reflecting a high bar for compliance.

The 2023 Financial Services and Markets Act recognizes crypto as a form of regulated products and property, enabling rules for promotions, trading, and stablecoins. The UK’s “same risk, same regulation” approach brings crypto under the umbrella of financial services regulation. As the UK’s approach is still evolving, full crypto market legislation is under construction in 2025.

Malta‘s 2018 Virtual Financial Assets Act created comprehensive crypto licensing through MFSA, requiring disclosure, auditing, and capital requirements. After attracting many firms (earning “Blockchain Island” status), Malta tightened oversight and aligned with MiCA in 2023. Today, Malta licenses exchanges under MiCA/MFSA with vigorous AML enforcement while supporting blockchain innovation.

Asia-Pacific

From some of the stringiest controls to some of the most innovation-friendly regimes – the Asia-Pacific region offers a wide spectrum of crypto regulatory frameworks for local digital asset markets. 

Driven by the 2014 Mt. Gox exchange hack, Japan was one of the first countries to regulate crypto. Since 2017, the Payment Services Act has recognized cryptocurrency as legal property and required all exchanges (29 licensed as of March 2024) to register with the Financial Services Agency (FSA).

The system is highly developed, requiring exchanges to meet strict standards for cybersecurity, asset segregation, and auditing. Following stablecoin failures abroad, in 2022 Japan passed a law that stipulates that only banks can issue yen-pegged stablecoins to protect consumers. 

While crypto is widely used for payments in Japan, it is not legal tender. The country’s cryptocurrency regime is praised for its balance: fostering innovation while maintaining the strict oversight that has largely prevented major exchange collapses. 

Singapore promotes itself as a crypto-friendly financial hub with tough, clear regulation. The Monetary Authority of Singapore (MAS) regulates crypto under the Payment Services Act (PSA) of 2019.

In Singapore, all crypto providers must obtain a license from MAS – a process known for being highly stringent. As a result, only 19 providers (out of hundreds of applicants) were authorized as of January 2024, signaling a focus on high-quality operators.

Regulation emphasizes strong AML/CFT measures and limits risk by restricting crypto marketing to the public. Singapore’s lack of capital gains tax attracts traders, and its stance is “tough but fair” – setting a high bar to protect its reputation.

Prioritizing transparency and security, South Korea has one of the strictest regulatory environments. 

Since 2018, the country has mandated a real-name trading system, linking all crypto accounts to identically named bank accounts to ban anonymous trading and curb money laundering. In 2021, the new law formally legalized and strictly oversaw exchanges (VASPs), forcing them to register with the Korea Financial Intelligence Unit (KoFIU), secure a cybersecurity certification from the Information Security Management System (ISMS), and comply with AML/KYC rules. 

These high hurdles led to major market consolidation, as only the largest exchanges initially succeeded. South Korea also bans ICOs domestically and passed the Virtual Asset User Protection Act (2023) to strengthen investor protection. Its approach is strict, enforcement-heavy, and fully FATF-aligned.

Down under, Australia takes a more cautious approach to crypto regulations, focusing on basic safeguards. Since 2018, exchanges have been required to register with AUSTRAC (the financial intelligence agency) and comply with AML/CTF requirements (identity verification, transaction monitoring).

In Australia, crypto is treated as property for tax purposes (subject to capital gains tax). However, the country lacks a comprehensive, crypto-specific licensing regime for crypto exchanges and custody.

The government initiated a “token mapping” project in 2022 to categorize crypto assets and was set to roll out a more specific licensing framework in 2025. For now, the rules focus on basic safeguards (AML and taxation), with broader, tailored regulatory reform on the way.

Africa 

In Africa, crypto use is booming for payments and savings, but regulations are still catching up. While some countries are actively integrating crypto, others remain hesitant. Here are the highlights from key African nations:

In October 2022, South Africa‘s Financial Sector Conduct Authority (FSCA) declared crypto assets “financial products” under the Financial Advisory and Intermediary Services (FAIS) Act, requiring exchanges, advisors, and brokers to obtain licenses as financial service providers. The Financial Intelligence Centre (FIC) added crypto providers to the AML law in 2022, mandating KYC and suspicious transaction reporting. The FATF Travel Rule became mandatory in South Africa in April 2025. While not legal tender, cryptocurrency is legal to trade, with gains taxed as income or capital gains. All in all, South Africa is emerging as Africa’s crypto regulation leader.

Meanwhile in Nigeria, the use of crypto is quite high. But in 2021, the Central Bank of Nigeria (CBN) instructed banks to stop servicing crypto exchanges, effectively banning crypto transactions within the banking sector. In late 2023, Nigeria pivoted: the CBN lifted the ban, allowing banks to serve SEC-licensed crypto businesses. The nation’s Securities and Exchange Commission’s (SEC) 2022 rules classify crypto as securities and require exchange registration. In 2022 Nigeria’s Finance Act taxed crypto gains at 10%. The country launched its CBDC (eNaira) in 2021, pursuing a dual strategy: promoting state digital currency while regulating private crypto. Nowadays, Nigeria is channeling massive crypto activity into formal, taxable, monitored platforms instead of driving it into the shadows.

Kenya passed the VASP Bill in October 2025, requiring crypto exchanges and wallet providers to obtain licenses and comply with consumer protection and reporting requirements. This push came from Kenya’s commitment to exit FATF’s “gray list” by strengthening AML controls (6+ million Kenyans use crypto, with ~$2 billion in recent decentralized protocol flows). The Kenya’s Finance Act of 2025 imposes a 10% excise tax on crypto transaction fees. Today, the country is moving from “wait and see” to active regulation, balancing innovation with licensing, AML checks, and taxation.

South America

Driven by high inflation and monetary controls, several South American countries are experiencing a boom in the crypto sector, and their governments are responding with a mix of new crypto regulations and innovation.

Brazil enacted its first crypto law in December 2022, giving the Central Bank of Brazil (BCB) authority to regulate crypto service providers. Exchanges and custodians must register with the BCB and follow AML and operational standards similar to financial institutions. Securities tokens remain under the Securities and Exchange Commission of Brazil (CVM) oversight. In 2023, Brazil launched its Central Bank Digital Currency (CBDC) pilot “Drex” to test distributed ledger technology with major banks. Crypto exchanges connect with Brazil’s instant payments network (PIX), and tax authorities require transaction reporting above certain thresholds. With one of the largest crypto user bases in South America, Brazil’s approach is comprehensive – meaning it fosters innovation under prudent oversight. With Brazil’s sizable crypto mining and a Bitcoin ETF listed on its stock exchange, it’s no surprise that observers see Brazil’s regulatory framework as a potential model for the region.

For years, Argentina had no explicit crypto regulations, allowing a thriving informal market to develop. Such a high crypto adoption level, driven mostly by economic instability, led to a necessity to formalize regulation. In April 2023, the central bank barred payment platforms from offering crypto, essentially preventing fintech apps from integrating crypto trading. In 2024, Argentina’s Congress enacted the law requiring VASPs to register with the National Securities Commission (CNV) and implement AML procedures under the UIF (Financial Intelligence Unit). 

Argentina taxed crypto profits for several years and, in 2022, offered a crypto tax amnesty program. By mid-2024, the government even committed to discouraging crypto use as part of an IMF agreement to protect the local currency. The current approach requires registration and AML compliance, and taxing transactions, while not banning crypto. At the moment, Argentina is attempting to balance its citizens’ use of crypto as an inflation hedge and means to access USD with the need to protect its currency controls.

Meanwhile, in Chile, the Fintech Law was enforced back in 2023, classifying crypto as financial instruments under Financial Market Commission (CMF) supervision, mandating crypto exchanges to register with the CMF within one year’s time or cease operations. This law categorizes crypto service providers, such as exchanges, as “financial service providers” 

Chilean crypto firms must comply with the AML rules, disclosure requirements, and prudential safeguards. The law also gives the Central Bank power to regulate crypto used for payments and contemplates the possibility of a Chilean CBDC, thus setting the stage for Open Banking and potentially integrating regulated crypto platforms with traditional finance. It’s safe to say that this framework aims to boost competition and inclusion while mitigating risks.

Key International Standard-Setting Bodies

Since cryptocurrency knows no borders, its regulation must be carefully orchestrated on both national and international levels. Coordinated actions are required from standard-setting bodies to effectively regulate cryptocurrency. Here is an overview of the key bodies:

FATF (Financial Action Task Force):

• Global AML watchdog that introduced the Virtual Asset Service Providers (VASPs) concept.
• Requires countries to license/register VASPs and enforce AML/CFT controls.
• Famous “Travel Rule”: VASPs must collect sender/recipient info for transfers above thresholds.
• By mid-2025, 99 jurisdictions implemented the Travel Rule laws.

Sets baseline: countries must impose FATF-compliant rules to remain part of global financial network.

Organization for Economic Co-operation and Development (OECD):

• Developed Crypto-Asset Reporting Framework (CARF) in 2022 for tax transparency.
• Requires crypto exchanges to collect user info and governments to share data to prevent tax evasion.
• 67 jurisdictions committed to implement CARF by 2027-2028.
• EU is incorporating CARF via DAC8, with reporting starting for 2026.
• Making digital assets as transparent to tax authorities as bank accounts under CRS.

EU’s MiCA:

• Comprehensive EU law serving as a potential global blueprint.
• Regulates stablecoin issuers (capital, liquidity, supervision requirements).
• Licenses crypto-asset service providers (exchanges, custodians, advisors).
• Influencing frameworks in Dubai, Hong Kong, and the UK.
• First large-scale single playbook for crypto markets, potentially inspiring global alignment.

Financial Stability Board (FSB):

• In 2023, published recommendations for “same activity, same risk, same regulation”.
• High-level recommendations for consistent national rules requiring crypto firms to meet risk management standards and control conflicts of interest. 
• Principles for managing global stablecoins that could become systemically important.

Basel Committee on Banking Supervision (BCBS):

• Set a new standard for bank capital requirements for crypto, effective as of January 2025.
• Group 1 (e.g., tokenized traditional assets) gets modified existing rules.
• Group 2 (e.g., volatile, unbacked crypto) has a limit of 2% of Tier 1 capital exposure for banks, requiring very high capital reserves against them.
• Heavily limits international banks’ cryptocurrency balance sheet exposure. 

International Organization of Securities Commissions (IOSCO):

• 2023 policy recommendations for crypto trading platforms and DeFi.
• Addresses conflicts of interest, fraud, manipulation.
• Requires DeFi transparency about protocol control and governance.
• Global rulebook for regulating crypto exchanges and decentralized finance.

The Future of Cryptocurrency Regulation

The regulation of cryptocurrency is expected to both broaden and deepen in the immediate future, as more countries are heading towards setting up clear frameworks. Also, it’s reasonable to expect a greater harmonization of international standards, as regulators are likely to move away from focusing on centralized exchanges to tackling emerging such areas as DeFi, NFTs and new blockchain innovations. 

Looking ahead towards 2030, the future trends of crypto regulations are likely to include:

2025-2027:

• MiCA’s full enforcement across the EU by 2025.
• Growing development and integration of Central Bank Digital Currencies (CBDCs) paired with digital identity systems.
• Increasing government scrutiny and tighter controls on decentralized finance (DeFi) platforms.
• Banks and tech giants offer crypto services under regulatory licenses.
• Crypto ETFs, derivatives, and tokenized assets become common investment offerings.
• Regulators refine rules for crypto products (tokenized stocks, retirement accounts).
• AI-powered AML monitoring tools improve real-time detection of illicit activities.

2027-2029:

• Blockchain-based digital identity solutions enforce compliance across exchanges.
• AI-powered real-time blockchain monitoring flags suspicious activity.
• DeFi protocols face regulation through interfaces, developers, or front-end platforms.
• Requirements emerge for DeFi liquidity providers, validators, and DAO governance.
• RegTech automates compliance reporting and AML analysis.

By 2030:

• The blur between “crypto companies” and “traditional finance” disappears.
• Laws govern CBDC-to-crypto conversion and mixed-wallet holdings.
• AI “on-chain auditors” enable quicker intervention on hacks and fraud.
• Clear frameworks distinguish regulated vs. truly decentralized protocols.
• Global coordination through G20/FSB establishes minimum standards, or fragmentation creates arbitrage havens.
• All major economies have defined crypto treatment – none completely unregulated.

Final Thoughts 

The story of crypto regulation is far from over, as the next five years are likely to bring greater clarity and maturity to the regulatory frameworks. We can expect more protections for users – which is good for mainstream adoption, as well as more integration of crypto into everyday finance – making the term “crypto” invisible as it blends into just “finance”. 

One thing is clear: crypto moves from the margins to the mainstream. Just as the internet in its early days was unregulated and later saw rules evolve for e-commerce, privacy, and security, the crypto realm is clearly going through a similar normalization. So, the regulators are now switching from posing the question “Should crypto exist?” to a more inclusive query, “How can we make crypto work safely within the existing financial system?”

Written by: Zarema Plaksij

Published November 6, 2025

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