As it sores in popularity, cryptocurrencies’ goal of becoming a regular legal tender is closer than ever before. However, as crypto becomes more mainstream, countries must craft legislation quickly so that its users are kept safe and legal when incorporating crypto into their financial transactions. Crypto is a major fintech invention that is rapidly changing how we make transactions; however, it comes with some risks that governments must consider when creating the regulations that encourage crypto, and its users, to thrive.
The Importance of Crypto Legislation
The world of cryptocurrency is constantly in flux. Digital assets can be speculative and have a tendency to increase and decrease in value over time (known as volatility.) Not only that but, due to the nature of crypto, it is possible for anyone to craft and exchange new currencies, meaning the crypto market is always growing. This is evidenced in the constant emergence of various crypto presale project initiatives, as well as the community that surrounds and encourages these new projects. On such occasions, investors, traders, and recreational crypto buyers alike have a chance to purchase a new coin (or its share) at a potentially more affordable price. Once the cryptocurrency in question becomes available to mainstream buyers, it may bring certain earnings to the owner (but it can also flop, just to be clear). That’s why every buyer needs to collect enough data about the coin in question and the logistics behind it beforehand.
Additionally, crypto is becoming much more mainstream. for example, as of 2025 in the US 27% of adults own cryptocurrency. These digital assets have certain benefits, and it seems they are not going anywhere any time soon.
In order to keep up with the demand and popularity of this versatile and changing world, governments need to craft clear legislation for their users, and quickly.
With that in mind, here are Five countries that are crafting new crypto regulations this year.
The United Kingdom
After its election win last year, the Labour Party has remained constant in its commitment to adopt and support the use of cryptocurrency in 2025. Speaking on their behalf Tulip Siddiq, a Labour Party minister, stated that the government is dedicated to forming new regulations, with all policies to be finalised by 2026. She also reassured crypto supporters by highlighting the initiative the government had shown in their crafting of the Digital Securities Sandbox last year which will aid the financial sector to use distributed ledger technology (DLT) to enhance the security of crypto trading. Additionally, the Chancellor of the Exchequer, Rachel Reeves announced that the government will be using this sandbox in order to issue a Digital Gilt Instrument (DIGIT) which will use blockchain technology.
All of this comes as a reassurance to UK-based crypto investors as it shows they the government remains steadfast in its commitment to crafting regulations, and that the timeline they have given is likely to be kept to.
The United States of America
President Donald Trump has been incredibly vocal about his support of cryptocurrency since his presidential campaign, where he promised to make the US the ‘crypto capital of the planet.’ Since his successful election, he has continued this rhetoric. Many are expecting an aggressive pro-crypto approach to crafting legislation this year. Dusty Johnson, who aided in the creation of the Financial Innovation and Technology for the 21st Century Act (FIT21), has stated that creating a regulatory framework for the industry is America’s priority. This commitment adds reassurance to those based in America that this work is very much at the forefront of their government’s minds.
However, many people remain concerned that the government is not as committed to reducing the security risks of crypto as they are to bringing it into mainstream society. In response, Johnson highlighted crypto-cyber security provisions in the act, predicting that these will be built upon in the near future. Hopefully, this will be a priority as legislation becomes more clear.
The State of Japan
Japan has remained supportive of incorporating cryptocurrency since its creation in 2009. This year, exciting developments are expected to come into action, which will see the various currencies redefined as ‘financial assets’ as opposed to their previous classification as ‘payment instruments.’ This would give cryptocurrencies more credibility and, Japan hopes, could see it better integrated into wider society. Additionally, the financial services agency (FSA) has considered changing Japan’s crypto tax rule, which aligns with the beliefs of the ruling Liberal Democratic Party (LDP)
Such a change could see traders subjected to significantly less income tax, which is good news for crypto enthusiasts based in Japan.
The People’s Republic of China
New regulations within China have had a detrimental effect on crypto traders. China, which has not legalised cryptocurrency transactions, has some of the harshest regulations and bans on the use of cryptocurrency in general. Such regulations have been even more tightly enforced in 2025, with banks now required, by law, to report seemingly suspicious crypto transactions. The result of this could see the user banned from other financial services.
However, all hope is not lost for China-based crypto enthusiasts as the country has actively praised Hong Kong for its position as a leader in the crypto realm. This proves the nation is not entirely against cryptocurrency, but it seems regular use and supportive legislation are still a long way off.
The European Union’s Markets in Crypto Assets (MiCA)
An exciting development, which saw the 27 countries of the European Union joining together to work on crypto regulation was finalised late last year. The Markets in Crypto Assets (MiCA) is the first major jurisdiction to have formed full regulation for the use of crypto assets. They have established legislation relating to how cryptocurrencies are issued as well as how related services operate. Not only that, but this move has seen the introduction of licensing requirements for cryptocurrency companies.
All of this contributes to the smooth integration of cryptocurrency on a global scale and also gives the countries that are a part of the EU clear rules and regulations when it comes to the distribution of digital assets and the transactions of these currencies.
Conclusion
The first cryptocurrency (Bitcoin) was created in 2009, but at that time it was mostly unknown. Although almost two decades have passed since its creation, governments still have a long way to go before all legislation is clear and unified in its aims. With that being said, as the population and use of crypto is more popular than ever, it does seem that movements to draft these necessary regulations are happening much more quickly than they ever have before.
Crypto users have been waiting a long time for clear legislation, but it seems their desires are soon to be met.
