Global Encryption Regulatory Landscape: A Complex Evolution from Convergence to Divergence

In recent years, with the rapid development of the encryption asset market, countries and regions around the world have introduced relevant regulatory policies, attempting to seek a balance between promoting innovation and preventing risks. From the ongoing game between the US SEC and encryption companies, to the comprehensive rollout of the EU MiCA legislation, and the difficult trade-off faced by emerging economies between innovation and risk, the global landscape of encryption regulation presents unprecedented complexity and diversity.

Asia

Hong Kong, China

Hong Kong adopts an open attitude towards encryption assets, viewing them as "virtual assets" rather than currency, regulated by the Securities and Futures Commission (SFC). The Anti-Money Laundering Ordinance was revised in 2023, requiring cryptocurrency exchanges to obtain licenses. The SFC is responsible for issuing licenses, and so far, HashKey and OSL have been the first to obtain licenses, with over 20 other institutions currently applying. Licensed exchanges are allowed to serve retail investors, and Bitcoin and Ethereum ETFs were listed in Hong Kong in 2024.

Taiwan, China

The Taiwan region does not recognize encryption currency as a currency, but views it as "highly speculative digital virtual goods". The Financial Supervisory Commission ( FSC ) has ordered local banks not to accept Bitcoin-related services. In March 2025, it was announced that laws would be drafted for virtual asset service providers ( VASP ), aiming to shift from a basic registration framework to a comprehensive licensing system.

China mainland

Mainland China has comprehensively banned the trading of encryption assets and all related financial activities. In September 2021, the People's Bank of China issued a notice prohibiting all services related to the settlement of virtual currencies and the provision of trader information, and it was clearly stated that engaging in illegal financial activities will incur criminal liability. Cryptocurrency mining farms have been closed, and the establishment of new mining farms is not allowed.

Singapore

Singapore views encryption assets as "payment tools/goods" and enacted the Financial Services and Markets Act in 2022 to regulate exchanges and stablecoins. The Monetary Authority of Singapore ( MAS ) has issued three types of licenses for crypto enterprises: currency exchange, standard payment, and major payment institutions, with over 20 institutions currently holding licenses.

South Korea

South Korea regards encryption assets as "legal assets" but not as legal tender. A real-name trading platform licensing system has been implemented, and currently, five major exchanges, including Upbit and Bithumb, have obtained licenses. The draft of the "Digital Asset Basic Law" (DABA) is being promoted, which aims to require transparency in stablecoin reserves.

Japan

Japan has officially recognized encryption assets as legal payment methods by amending the "Payment Services Act" and the "Financial Instruments and Exchange Act." The Financial Services Agency (FSA) ( is responsible for regulating the encryption market, and there are currently 45 licensed institutions. The Japanese market is mainly dominated by local exchanges such as Bitflyer.

Europe

) EU

The European Union has established a unified regulatory framework through the "Market in Crypto-Assets Regulation" ### MiCA (. MiCA defines crypto assets as "legal tender but not fiat currency." It imposes strict regulations on stablecoins, requiring a 1:1 fiat backing and full reserves. MiCA adopts a "single license for all" model, significantly simplifying the compliance process.

) UK

The UK regards encryption assets as "personal property". The Financial Services and Markets Bill ###2023( brings encryption assets under regulatory oversight. The Financial Conduct Authority )FCA( is responsible for issuing relevant licenses. The UK market is mainly dominated by local exchanges such as Bitflyer, and international platforms usually need to enter through joint ventures.

) Switzerland

Switzerland adopts a positive attitude towards encryption assets, with the Financial Market Supervisory Authority ###FINMA( classifying them based on economic and practical use. The Blockchain Act was passed in 2020, providing a comprehensive definition of token rights. FINMA is responsible for issuing licenses to virtual asset service providers )VASP(.

Americas

) United States

The regulation of encryption assets in the United States shows significant interstate differences. At the federal level, the IRS ### regards them as "property". The SEC primarily regulates tokens based on securities laws. New York State has a BitLicense licensing system. Major cryptocurrency trading platforms like Coinbase and Kraken operate in compliance in the United States.

( Argentina

Argentina allows the use and trading of encryption currencies, but does not consider them as legal tender. In 2024, Law No. 27739 was enacted, incorporating virtual asset service providers )VASP### into the legal and financial framework. VASPs must register with the financial regulatory authority Comisión Nacional de Valores(CNV) to provide encryption services.

Middle East

( UAE

The UAE has a positive attitude towards encryption currency and blockchain technology. The Dubai Virtual Assets Regulatory Authority ) VARA ### is specifically responsible for the regulation of virtual assets. The Abu Dhabi Global Market ( ADGM ) has a comprehensive regulatory framework for virtual assets within its financial free zone.

( Saudi Arabia

Saudi Arabia adopts a cautious approach towards encryption currency. The banking system completely prohibits the use of encryption currency, and financial institutions are also prohibited from conducting encryption currency transactions. The Saudi Arabian Monetary Authority )SAMA### and the Capital Market Authority (CMA) emphasize adopting a "cautious approach" towards innovation in encryption currency.

Africa

( Nigeria

Nigeria's cryptocurrency regulation has shifted from initial restrictions to a more formal and comprehensive framework. In December 2023, the Central Bank )CBN### lifted the restrictions on cryptocurrencies. The Securities and Exchange Commission (SEC) is responsible for regulating virtual asset service providers (VASP).

( South Africa

South Africa has officially recognized encryption assets as financial products. The Financial Sector Conduct Authority )FSCA### is the main regulatory body for encryption service providers. The licensing process for encryption asset service providers (CASP) was launched in June 2023.

Summary

The global encryption currency regulatory landscape is undergoing continuous evolution, presenting a situation of both convergence and divergence. Anti-money laundering ( AML ) and counter-terrorism financing ( CFT ) have become a common consensus. The EU MiCA legislation is becoming a global reference. However, there are still significant differences in the legal definitions of encryption assets among countries.

The main challenges currently include difficulties in cross-jurisdictional coordination, the speed of technological development versus regulatory lag, and how to balance innovation with risk. In the coming years, global encryption regulation will continue to develop towards a more mature and refined direction, but its complexity and dynamism will persist.