2025 Global Crypto Policy Review and 2026 Outlook: Regulatory Clarity Drives Institutional Adoption

2025 Global Crypto Policy Review and 2026 Outlook: Regulatory Clarity Drives Institutional Adoption

In 2025, global cryptocurrency regulation reached a critical turning point. As the United States reshaped its policy direction under the Trump administration, stablecoins became a regulatory focus, with over 70% of surveyed jurisdictions advancing dedicated regulatory frameworks. Meanwhile, around 80% of financial institutions in surveyed jurisdictions announced digital asset-related plans, accelerating institutional adoption amid improved regulatory clarity. TRM Labs' latest report, "Global Crypto Policy Review & Outlook 2025/26," systematically documents this process, providing an important reference for the fintech industry.

Industry Background: From Fragmentation to Accelerating Integration

Over the past decade, cryptocurrency regulation has remained fragmented. Different countries have varying requirements for the classification, licensing, and anti-money laundering (AML) of digital assets, imposing significant compliance burdens on businesses operating across borders. However, 2025 became a watershed. The United States shifted to a proactive policy stance, with legislation such as the GENIUS Act promoting regulatory clarity for stablecoins; the EU's MiCA entered its implementation phase, albeit with uneven enforcement across member states; Hong Kong, Japan, Singapore, the UAE, and other jurisdictions also introduced new rules. This trend indicates that regulation is moving from passive response to active guidance, creating a more predictable operating environment for digital banking and payment infrastructure. At the same time, central bank digital currency (CBDC) projects are being explored, with practices in countries such as Brazil providing valuable lessons for policymakers.

Current Developments: Stablecoins and Institutional Adoption as Twin Drivers

Stablecoin Regulation: From Store of Value to Medium of Exchange

In 2025, the total market cap of stablecoins reached an all-time high, and their combination of value stability and blockchain efficiency made them a potential tool for payments and settlement. The report shows that over 70% of surveyed jurisdictions advanced new stablecoin regulatory frameworks. The United States clarified issuance and reserve requirements through the GENIUS Act, the EU implemented MiCA, and Hong Kong, Japan, Singapore, and the UAE are also developing corresponding regimes. These frameworks focus on core aspects such as issuance, reserves, and redemption, laying the foundation for stablecoins to become a true medium of exchange.

Regulators recognize that stablecoins have the potential to become a genuine medium of exchange on public blockchains, making dedicated legislation a consensus. For example, Hong Kong has introduced a stablecoin licensing regime with high thresholds, while Japan and Singapore balance innovation and safety through gradual rules. These measures not only affect the crypto market but also open new possibilities for cross-border payments and real-time payments systems.

Institutional Adoption: Regulatory Clarity as a Catalyst### Institutional Adoption: Regulatory Clarity as a Catalyst

As rules become clear, financial institutions are actively entering the space. The report notes that in 2025, approximately 80% of surveyed jurisdictions saw financial institutions announce digital asset plans. In the United States, the European Union, and some Asian markets, a friendly regulatory environment is fostering institutional engagement with public blockchains. Conversely, in jurisdictions with ambiguous rules or restrictions on bank participation, institutional attitudes remain more cautious.

A key signal is that the Basel Committee announced in November that it would reassess the prudential rules for banks' crypto-asset exposures. The full capital deduction originally planned for implementation in January 2026 may be adjusted, as major jurisdictions such as the United States and the United Kingdom have declined to adopt the standard, and the stablecoin market is growing rapidly. This change could open more room for banks to participate in digital assets, further driving institutional adoption.

Global Consistency: Combating Regulatory Arbitrage and Illicit Finance

The effects of regulation are evident. TRM analysis found that regulated virtual asset service providers (VASPs) have a significantly lower illicit activity rate than the overall ecosystem. For example, VASPs, as the most broadly regulated segment of the crypto ecosystem, have an illicit activity rate well below average. This means that compliant intermediaries become important partners in combating financial crime.

However, the global and borderless nature of the crypto market demands regulatory consistency. FATF warns that as long as gaps exist in the implementation of standards, "VASPs in jurisdictions with weak or no regulatory frameworks" may be exploited. FSB also emphasizes that "gaps and inconsistencies" in standards implementation could pose risks to financial stability. The record-breaking 2025 attack by North Korean hackers on Bybit, which involved laundering through unlicensed OTC brokers, cross-chain bridges, and decentralized exchanges, highlights challenges beyond the regulatory perimeter and reinforces the need for cross-jurisdictional coordination and real-time information sharing.

Impact on the Financial System

The evolution of global crypto policy is reshaping multiple dimensions of the financial system:

• Payment efficiency: Stablecoins can serve as an efficient digital medium of exchange, reducing costs and time for cross-border payments and driving upgrades to real-time payment networks.
• Financial inclusion: In regions where traditional finance has insufficient coverage, stablecoins and digital assets provide new payment and savings tools, promoting financial inclusion, especially in emerging markets.
• Banking competition: Bank participation in public blockchains may change traditional banking business models, making open banking and embedded finance new frontiers for cooperation and competition.
• Compliance costs: Regulated VASPs bear higher compliance obligations but also gain opportunities for institutional collaboration; compliance becomes a competitive advantage, requiring fintech companies to increase investment.
• Risk management: The softening of Basel rules may reduce bank capital pressure, but price volatility and operational risks of crypto assets still require prudent management, and the application of AI in finance is increasingly important.

Challenges AheadDespite the positive signals brought by regulatory progress, the path to maturity still faces multiple challenges:

• Regulatory inconsistency: Differences in rules across jurisdictions persist, and cross-border operators must navigate complex compliance requirements. Regulatory arbitrage risks remain, especially in the stablecoin and VASP sectors.
• Illicit finance: Unregulated or weakly regulated platforms continue to be exploited, as seen in the Bybit hacker incident, which exposed deficiencies in law enforcement coordination. Strengthening cross-agency cooperation has become an urgent priority.
• Data privacy and security: Balancing the traceability of crypto transactions with financial privacy, as well as addressing cybersecurity issues on digital asset platforms, still requires ongoing exploration. As cyber threats escalate, security technologies must evolve in tandem.
• Technology integration: Traditional financial institutions integrating with blockchain infrastructure face challenges such as system upgrades, talent shortages, and governance issues; the complexity of technology integration cannot be ignored.

Future Outlook

Looking ahead to 2026, global crypto regulation is expected to evolve along a path of clarity, consistency, and institutionalization. Stablecoin regulatory frameworks will be further refined, and institutional participation will continue to deepen. With the review of the Basel rules, banks are likely to enter digital asset markets more actively. International organizations will promote unified standards to narrow gaps between jurisdictions. Meanwhile, the application of compliance and anti-money laundering technologies, such as real-time information-sharing platforms (e.g., Beacon Network), will enhance the industry's ability to combat illicit finance. Over the next three to five years, crypto assets are expected to move from the periphery toward becoming part of mainstream financial infrastructure, and regulatory design will determine their trajectory.

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*This article is based on the TRM Labs report "Global Crypto Policy Review & Outlook 2025/26", which covers 30 jurisdictions accounting for over 70% of global crypto asset exposure. See original text: https://www.trmlabs.com/reports-and-whitepapers/global-crypto-policy-review-outlook-2025-26*