Cryptocurrency Regulation: A Guide to US and Global Policies

Details vary by country, but most regulatory efforts aim to balance innovation with investor protection, financial transparency and systemic stability. Whether treating digital currencies as property, commodities or securities, governments are now asserting clearer authority over how cryptocurrencies are issued, traded and taxed.

Understanding the goals and structure of these regulations can shed light on how crypto-technologies are being integrated into financial systems — and where challenges remain.

In July 2025, Congress passed the GENIUS Act, a major step toward comprehensive crypto regulation. Two other high-profile bills — the CLARITY Act and the Anti-CBDC Surveillance State Act — passed the House and remain under Senate consideration.

GENIUS Act: Regulates the issuance of payment stablecoins, requiring full reserve backing, monthly audits and anti-money laundering compliance. Only approved issuers may create stablecoins pegged to the US dollar. CLARITY Act: Defines how digital assets are treated under federal securities and commodities laws. It also aims to reduce regulatory overlap and increase transparency for both businesses and investors. Passed the House in 2025; pending in the Senate.Anti-CBDC Surveillance State Act: Seeks to block the Federal Reserve from creating a central bank digital currency (CBDC) for public use without congressional approval. Passed the House in 2025; pending Senate action. (A separate but similar bill called the NO CBDC Act has been introduced in the Senate.)

These proposals, along with the newly enacted GENIUS Act, help define the roles of major federal agencies involved in cryptocurrency oversight. Under the updated framework:

Although states continue to play a major role in licensing and consumer protection, particularly through money transmitter laws, the GENIUS Act — and the pending CLARITY Act — reflect a move toward greater federal coordination in digital asset oversight.

How the US regulates stablecoins

The GENIUS Act is the first federal law in the United States to establish clear rules for stablecoin issuance. The law defines payment stablecoins as digital assets linked to the dollar and intended for use in payments. Only issuers approved by US regulators – or foreign entities registered in the US – may create such tokens.

Issuers must maintain full reserve backup, meaning they must hold an equivalent amount of cash or highly liquid assets for each stablecoin in circulation. The provision is designed to ensure that each token can be reliably redeemed for its face value. The law also requires monthly audits, anti-money laundering compliance, consumer protection standards and disclosure rules intended to promote market confidence.

US Policy on CBDCs

The Anti-CBDC Surveillance State Act passed the House in July 2025. A companion effort in the Senate, the NO CBDC Act, was also introduced with similar goals. If enacted, either bill would prohibit the Federal Reserve from issuing a retail CBDC without express authorization from Congress. The law reflects concerns about government overreach, surveillance and the potential for a state-owned retail banking system.

Under the law, the Fed cannot operate retail accounts or distribute a digital dollar for consumer use. The US approach differs from that of countries such as China, which have started public CBDC pilot programs. Instead, US policy limits the government’s role in issuing digital currency and leaves the development of digital payment systems to the private sector.

How other countries approach crypto regulation

Regulatory approaches to cryptocurrency vary greatly from country to country. While some governments aim to encourage blockchain innovation through comprehensive legal frameworks, others focus primarily on consumer protection, taxation or financial stability. The following examples illustrate the range of global strategies:

Canada. Canada requires cryptocurrency trading platforms to register with provincial regulators and comply with anti-money laundering rules. Crypto investment firms are classified as money service businesses, and digital assets are taxed like commodities. The country also allows cryptocurrency exchange-traded funds (ETFs) to be listed on the Toronto Stock Exchange.United Kingdom. The UK began regulating cryptocurrency in 2020. In October 2023, the Financial Conduct Authority (FCA) introduced stricter rules on crypto advertising. The Financial Services and Markets Act 2023 also expanded oversight of stablecoins. A broader regulatory framework for crypto-assets is in development, with implementation expected by 2026. Switzerland. In 2020, Switzerland introduced a distributed ledger technology (DLTs) law that introduced DLT securities and enabled the tokenization of financial instruments, rights and claims. The country’s regulatory approach is seen as permissive but structured. Crypto holdings may be subject to income and wealth taxes.El Salvador. In 2021, El Salvador became the first country to declare Bitcoin legal tender. It can be used to pay taxes, and the use of Bitcoin is mandatory for merchants, although enforcement has been uneven and many businesses do not routinely accept it. The government also offers tax exemptions for foreign investors on income earned from Bitcoin transactions.Singapore. The Southeast Asian nation licenses cryptocurrency exchanges and escrow wallet providers under its Payment Services Act, which was enacted in 2019. The Monetary Authority of Singapore (MAS) also provides detailed guidance on risk management, advertising and regulation of stablecoin. The country aims to support innovation while imposing strict safeguards on retail crypto services.European Union. The EU adopted its first unified crypto regulation, the Markets in Crypto-Assets (MiCA) regulation, in 2023, although most provisions did not enter into force until 2024. MiCA sets common rules for issuers of stablecoins, cryptoasset service providers and trading platforms across all member states. The framework emphasizes investor protection, financial stability and cross-border regulatory consistency.China. China began restricting cryptocurrencies in 2017 by banning exchanges and initial coin offerings (ICOs), followed by a sweeping 2021 crackdown that banned crypto-mining and most crypto-transactions. At the same time, the government developed its own CBDC, the digital yuan, which entered pilot testing in late 2019 and has since expanded to more cities and applications.

Risks of regulating digital assets

Many participants in the cryptocurrency industry are strong advocates of increased oversight — but that doesn’t mean regulating crypto comes without downsides. Key risks include:

Regulation can limit market access. Enhanced crypto regulation may result in some investors having limited access to cryptocurrencies or other digital assets. Crypto rules can stifle innovation. Strict rules and compliance requirements can slow or hinder the pace of blockchain innovation. Regulation can create jurisdictional enforcement challenges. If every legislative body and government agency sets its own crypto policies, enforcing all those regulations can become extremely complex. Crypto regulations can increase the cost of doing business. Complying with crypto rules can mean spending money on additional infrastructure or time-consuming compliance processes. Crypto laws create an obligation to stay informed about rule changes. Participants in the crypto sector need to understand the current rules, plus stay alert for policy changes. More rules could mean a bigger impact on crypto’s financial performance. Expanded regulations governing the cryptocurrency industry could increase the cost of holding digital assets, thereby reducing their price performance.

The bottom line

Regulation of cryptocurrencies can strengthen investor protection, deter illegal activity, and encourage the broader adoption of digital assets. But unclear rules and policies that emphasize enforcement without detailed guidance have made compliance challenging. As lawmakers and agencies refine their approaches, the regulatory picture is expected to evolve and shape how cryptocurrencies fit into the broader financial system.