2025 Global Crypto Regulatory Landscape: The Beginning of an Era of Acquisition, A Year of Convergence for Crypto and TradeFi

Objectively speaking, 2025 is definitely the most pivotal year in the last decade for Crypto/Web3.

If the past decade was a period of "wild growth" for the crypto industry on the fringes of mainstream finance, then 2025 marks the beginning of this species' formal "legitimization evolution":

From stablecoins to RWA, from Washington's policy abrupt turn to the finalization of rules in Hong Kong and the European Union, the global regulatory logic is undergoing an epic paradigm shift.

I. United States: Crypto receives institutional redress

For a considerable period, the regulation of the crypto industry in the United States has been more like a tug-of-war lacking consensus.

The U.S. Securities and Exchange Commission (SEC) during Gary Gensler's era is a prime example. It frequently uses enforcement actions to define the legal boundaries of crypto assets. Prosecution, investigation, and deterrence have become the main themes. This "enforce first, define later" regulatory approach has not only put a large number of developers and entrepreneurs in a highly uncertain environment, but has also kept the entire industry under high pressure for a long time.

However, with the new administration taking office in 2025, this situation has been fundamentally reversed. Washington no longer tries to force crypto assets into the old securities law system that originated in the 1930s, but begins to openly recognize their status as a "new type of hybrid asset" that is different from traditional securities, commodities and currencies.

The highlight of this shift was the formal signing of the GENIUS Act in July 2025. This act not only established a federal-level regulatory framework for stablecoins, requiring issuers to hold 100% highly liquid reserves (such as cash or US Treasury bonds), but more importantly, it clarified that holders of stablecoins have priority in claiming compensation in the event of the issuer's bankruptcy. This means that the on-chain form of the US dollar has been incorporated into the national institutional framework for the first time.

In response, in 2025 the United States also established the "National Digital Asset Reserve" through an executive order, listing previously confiscated Bitcoin as a strategic asset. This move completely changed the status of Bitcoin in global asset pricing, making it leap from a "marginal alternative asset" to part of national strategic competition.

Of course, this shift was not accidental. With the appointment of the new SEC Chairman Paul Atkins, the "enforcement-style regulation" that had long loomed over the market came to an end. Long-term investigations and accusations against projects such as Coinbase (COIN.M), Ripple, and Ondo Finance were successively withdrawn or downgraded, and Crypto officially returned to the policy discussion table from being a target of enforcement.

At the same time, the new government's core leadership has shown an unprecedented high degree of overlap with technology capital and crypto capital—from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to Director of National Intelligence Tulsi Gabbard, a group of decision-makers who clearly support AI, Web3 and new financial technologies have entered the center of power, and crypto assets are no longer an "outlier" in the political system.

Interestingly, on December 2nd, Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), officially announced the end of the era of "enforcement regulation" targeting the crypto industry that had lasted for several years during a speech at the New York Stock Exchange, and stated that the SEC would usher in a new era of compliance in January 2026.

This new policy, known as the "innovation exemption," marks a shift in US regulators' approach from passively cracking down on individual cases to establishing "compliance sandboxes" with clearly defined entry standards. According to the "Project Crypto" plan disclosed in November, eligible DeFi protocols and DAOs will receive a 12- to 24-month compliance buffer period, during which projects will not need to undergo cumbersome S-1 security registration and can operate simply by submitting a simplified version of the information.

This mechanism completely breaks the vicious cycle that has long plagued the industry: startup protocols cannot afford high compliance costs, yet face accusations due to lack of registration. At the same time, the new asset classification law refines digital assets into commodity, functional, collectible, and tokenized securities, providing a clear legal exit for assets that can prove "full decentralization".

In conclusion, the regulatory shift in the United States by 2025 is clear enough: crypto is no longer a systemic risk that needs to be suppressed, but rather an institutional variable that is incorporated into rules and can be guided.

II. The European Union, Hong Kong, and Japan: The Establishment of a Multipolar Order

While the United States reversed its policy, other major economies did not choose to follow suit with easing, but instead embarked on three distinct regulatory paths that all pointed toward co-optation.

EU

First, there's the EU. 2025 will be the first full year after the EU's Crypto Asset Markets Act (MiCA) is fully implemented (it officially came into effect in mid-2024). As we all know, the core objective of MiCA is not to incentivize innovation, but to exchange unified rules for financial stability and cross-border controllability. For example, through a "passport" system of licenses, compliant crypto service providers can operate freely in the 27 member states, but at the cost of significantly raised compliance thresholds.

It was against this backdrop that in 2025, in order to meet MiCA’s stringent audit transparency, penetrating supervision and extremely high capital requirements, a large number of small and medium-sized cryptocurrency service providers (VASPs) were forced to withdraw from the European market because they could not afford the compliance premium. Even some leading DEXs temporarily suspended their front-end trading functions in Europe because they could not meet specific identity verification requirements.

At the stablecoin level, the EU has also demonstrated strong "monetary protectionism," especially by setting strict daily transaction limits and reserve requirements for non-euro stablecoins, which has objectively created a barrier at the retail level in Europe, forcing liquidity to flow back to compliant euro stablecoins (such as EuROC).

Hongkong

In contrast to the EU's defensive stance, Hong Kong demonstrated a strong offensive approach in 2025. With the Hong Kong Stablecoin Ordinance officially taking effect on August 1, 2025, fiat-pegged stablecoins were formally included in the licensing system, marking Hong Kong's transformation from a retail trading center to a global clearing center for institutional assets.

Hong Kong's strategic intent is very clear: it is no longer just a platform for buying and selling crypto assets, but an Asian institutional interface connecting Chinese capital, international capital, and on-chain finance. Therefore, this year Hong Kong has promoted the tokenization process of RWA on a large scale, and is committed to introducing traditional assets such as government bonds and trade finance into the global field of vision through on-chain clearing.

More significantly, Hong Kong and the mainland have different functions in Web3. According to the latest Caixin report, the Hainan Free Trade Port and Hong Kong complement each other: Hainan, as a trade hub facing domestic and international markets, focuses on physical trade and data circulation; while Hong Kong, as a financial testing ground, undertakes high-pressure testing tasks such as Bitcoin strategic reserves and cross-border payments with stablecoins.

This front-store-back-factory model makes Hong Kong, in 2025 and into 2026, the only unique node in the world that can both reach traditional Chinese capital and seamlessly access Web3 native liquidity.

Japan

In contrast, Japan's regulatory approach appears more restrained. Previously, it had long managed businesses such as exchanges, custody, and intermediaries in a segmented manner. However, due to the extremely stringent regulations and comprehensive taxation of up to 55% after 2018, it was regarded as a crypto desert by developers.

However, Japan's tax reform outline for fiscal year 2026 recently proposed to gradually position crypto assets as "financial products that help form national assets," and explored the application of separate taxation for spot, derivatives and ETF trading gains. The tax rate is expected to drop sharply from the 55% ceiling to 20%, the same as stocks, and introduced a loss carryforward of up to 3 years.

This could directly revitalize Japan's massive retail and institutional market. Coupled with Japan's lifting of the ban on Bitcoin spot ETFs and the issuance of the first batch of stablecoin operating licenses to giants such as Circle and SBI, objectively speaking, Japan is attempting to leverage its mature compliance system to try and regain its long-lost voice in Asian crypto finance.

III. After the "Incorporation": The Reshuffling of Stablecoins and the Repositioning of Web3

Globally, the main theme of regulation in 2025 is "incorporation".

Regulators have realized that the decentralized financial power inherent in crypto technology cannot be completely eliminated. Therefore, the most effective governance strategy is to deconstruct and absorb its logic and ultimately integrate it into the existing global financial landscape.

This incorporation does not negate the value of Crypto. On the contrary, it means that regulators have implicitly accepted the premise that encryption technology itself is efficient, irreversible, and worth preserving, provided that it is incorporated into an understandable, auditable, and accountable institutional structure.

This regulatory shift has brought about an unprecedented dual effect. On the one hand, there is a rapid return of liquidity and credit, as compliance has indeed emboldened massive amounts of capital to enter the market and made institutions willing to allocate funds. On the other hand, it presents a profound challenge to the original spirit of Web3: when rules become the prerequisite, how much decentralization remains?

In this paradigm shift, stablecoins have become the first and most typical point of pressure.

The reason is not complicated. As the infrastructure with the deepest intertwining and widest penetration of Crypto and TradeFi, stablecoins are naturally at the center of regulators' attention. They connect to fiat currency, influence payments, participate in clearing, and are also deeply embedded in DeFi and on-chain liquidity systems.

Therefore, stablecoins have clearly entered an epic period of reshuffling this year.

In July, US President Trump officially signed the GENIUS Act, marking the final implementation of stablecoin legislation; in August, Hong Kong's Stablecoin Ordinance also came into effect, becoming the world's first regional regulatory framework; at the same time, major economies such as Japan and South Korea are also accelerating the follow-up of regulatory details, intending to allow compliant entities to issue stablecoins.

In other words, the stablecoin sector has entered a true "regulatory window"—gradually evolving from a gray-area liquidity tool into a financial infrastructure that combines compliance and experimentation (further reading: " Gray Behemoth vs. Whitelisted Players: A Look at the 'Fork Moment' Brought by Compliant Stablecoins ").

In this process, the market will inevitably diverge. On one end are institutional stablecoins that are included in the whitelist system and assume payment and settlement functions; on the other end are crypto-native stablecoins that continue to serve on-chain native finance and emphasize censorship resistance and self-custody. They will not simply fight to the death, but will serve completely different scenarios and user groups.

The real change is that stablecoins are being asked, for the first time, a question: which part of the financial system do you want to be?

This is also a question that other Crypto/Web3 sectors must answer in 2026.

Conclusion

2025 will undoubtedly be a clear turning point.

Regulation is no longer a vague, confrontational, or passive force, but is beginning to systematically shape the structure, boundaries, and development path of the crypto industry. From the United States to the European Union, from Hong Kong to Japan, regulations are incorporating crypto into the system at an unprecedented pace.

However, we also need to be clearly aware that:

Compliance is merely a means, not the end result of Web3.

In this global process of co-optation and restructuring, discerning which are merely noises to be washed away by time and which are the true cornerstones of the future will become an essential lesson for every Web3 participant.

Regulation is no longer the “enemy” of the crypto industry, but rather a stepping stone to its multi-trillion-dollar market size.