Cryptocurrency Regulations in 2025: Legal Shifts in the US, EU, and China
In 2025, global cryptocurrency regulation continues to evolve at pace. The world’s most influential jurisdictions—the United States, European Union, and China—have each adopted distinctive regulatory paths, influenced by national priorities and financial risk strategies. This article examines the major legislative changes taking place in these regions as of June 2025, highlighting how each government is approaching digital assets, investor protection, and central bank digital currency development.
US Regulatory Framework: Clarity and Control
In the United States, 2025 has marked a turning point in crypto regulation. After years of inconsistent oversight and jurisdictional disputes between the SEC and CFTC, the Digital Asset Market Structure Act (DAMS Act) was signed into law in May. This legislation defines a clear distinction between digital commodities and securities, enabling regulatory clarity for exchanges and developers.
Under the new law, cryptocurrencies like Bitcoin and Ethereum are classified as digital commodities, regulated primarily by the CFTC. Tokens issued via Initial Coin Offerings (ICOs), however, fall under the SEC’s jurisdiction as securities. This dual-regulator model has been widely welcomed by the industry for reducing legal uncertainty.
Meanwhile, stablecoins are now subject to federal supervision. The Stablecoin Transparency and Oversight Act mandates real-time auditability, reserve asset requirements, and mandatory issuer licensing. Banks and fintech companies alike must comply with these new rules if issuing or trading USD-backed stablecoins.
Taxation and Anti-Money Laundering Measures
In parallel with structural reform, tax authorities have intensified scrutiny of digital assets. As of June 2025, all crypto transactions over $200 are reportable under updated IRS guidance. Wallet providers and decentralised apps must implement Know Your Customer (KYC) protocols to remain compliant.
Furthermore, the Financial Crimes Enforcement Network (FinCEN) has introduced new requirements for international crypto transfers exceeding $1,000. Exchanges and brokers must report the sender and receiver’s identity, even if the recipient uses a non-custodial wallet.
These measures signal Washington’s firm stance on preventing illicit use of digital assets while encouraging institutional investment by offering legal predictability.
EU Approach: Uniformity Through MiCA
The European Union continues its leadership in structured crypto legislation through the Markets in Crypto-Assets (MiCA) regulation, which came into full effect in January 2025. MiCA applies across all 27 member states, creating a harmonised framework for licensing, capital requirements, and consumer protection.
Under MiCA, crypto service providers must register in one EU state to operate across the bloc. This “passporting” model has stimulated cross-border innovation, especially among startups. MiCA also sets detailed rules for stablecoins (referred to as “asset-referenced tokens”) and e-money tokens, limiting daily transactions above €200 million unless the issuer is a licensed credit institution.
Environmental sustainability remains a core focus. Proof-of-work cryptocurrencies are under review in terms of energy efficiency disclosures. While an outright ban has been rejected, the European Securities and Markets Authority (ESMA) requires exchanges to report carbon footprints for high-impact coins.
Data Privacy and DeFi Considerations
One of the EU’s most progressive moves in 2025 is its legal recognition of decentralised finance (DeFi) projects. MiCA-compatible DeFi platforms must adhere to transparent governance, automated compliance mechanisms, and secure smart contract audits to qualify for legal operation.
Additionally, the European Data Protection Board (EDPB) has issued new crypto privacy guidelines to align blockchain records with GDPR requirements. Wallet addresses linked to users are now considered personal data, placing strict controls on how decentralised systems store and disclose such information.
As the EU balances innovation with consumer safeguards, it positions itself as a global benchmark for crypto accountability and user rights.
China’s Strategy: State Control and CBDC Promotion
In contrast to the West, China continues to enforce a blanket ban on cryptocurrency trading and mining. However, 2025 has seen a major expansion of the country’s digital yuan initiative. The People’s Bank of China (PBoC) has rolled out pilot programmes in over 70 cities, with mandatory adoption in state-owned enterprises and public services.
Chinese officials assert that the digital yuan (e-CNY) enhances payment efficiency and reduces reliance on global financial systems. In June 2025, a nationwide incentive programme was launched, offering e-CNY cashback rewards for everyday purchases. This strategy has pushed daily transaction volumes beyond 100 billion yuan.
Cross-border trials are also expanding. China has partnered with the UAE and Singapore to test the use of e-CNY for import-export settlements via a permissioned blockchain, bypassing SWIFT and enhancing real-time liquidity in trade finance.
Enforcement and International Diplomacy
While China maintains its ban on decentralised cryptocurrencies, enforcement has become more targeted. Mining detection algorithms are deployed by telecom providers to identify and shut down unauthorised mining farms. Offshore exchanges targeting Chinese users are regularly blocked by the country’s cyber police unit.
Internationally, China advocates for a multilateral approach to digital asset governance. At the June 2025 BRICS Summit, Beijing proposed a new global crypto regulatory forum to coordinate anti-fraud protocols and CBDC interoperability standards. This move reflects China’s ambition to shape the digital economy while consolidating control domestically.
Ultimately, China’s regulatory path is centred on state power, centralised architecture, and global influence—fundamentally diverging from Western decentralised models.