Latest Crypto Developments Reshape Global Financial Landscape
The global cryptocurrency sector is undergoing significant regulatory and market shifts as 2025 unfolds, with the European Union (EU) and the United States (US) adopting divergent approaches to the management of decentralized currency over the past several months. As Bitcoin appears to be in the midst of another major cyclical run-up, several less-heralded ‘altcoins’ are following its lead, with XRP, Ethereum and others reaching levels unseen in their recent history and creating new millionaires in the process. This upward trend was further boosted by a series of positive regulatory initiatives announced in the U.S. over the last week alone. The latest developments in this sphere however come at a critical juncture for crypto’s potential integration into mainstream finance, with financial regulators and government bodies attempting to balance innovation with heightened scrutiny over this space given its historical propensity for abuse by bad actors.
EU Tightens Crypto Oversight with AMLA and MiCA
While the social sentiment around cryptocurrency remains highly positive at the moment, the European Union’s Anti-Money Laundering Authority (AMLA) – an agency established in 2024 for purposes of strengthening legislative policy framework to ensure the integrity of the region’s financial system as part of the EU’s greater anti-financial crime efforts – has flagged crypto assets as a top money laundering priority due to their cross-border nature, explicit anonymity making transactions more difficult to track, and their rapid transfer capabilities. AMLA Chair Bruna Szego recently emphasized that these assets remain arguably Europe’s biggest challenge to stopping dirty money from infiltrating the region’s financial system, while compounding the need to scrutinize crypto asset service providers (CASPs), such as exchanges, to ensure their owners are not linked to illicit activities. Szego spoke to the fact that the European crypto market is still quite fragmented, and is further impacted by a rush of new CASP’s attempting to gain licensure across Europe.
To date, the EU remains ungoverned by a single entity for crypto regulation, however it has developed one harmonized regulatory framework called Markets in Crypto-Assets Regulation (MiCA) which establishes uniform rules across all 27 EU member states for crypto-assets not covered by existing financial services legislation. MiCA, which was made effective in December 2024, imposes bank-like rules on stablecoins and other crypto assets, requiring the implementation of robust anti-money laundering (AML) and counter-terrorism financing (CTF) measures. The “travel rule” mandates CASPs to collect and share originator and beneficiary information for all crypto transfers, aligning with Financial Action Task Force (FATF) standards. By 2028, the AMLA plans to directly supervise around 40 high-risk financial institutions, including some CASPs.
Szego also noted challenges with “inconsistent controls” across the EU’s 27 national regulators, which AMLA aims to better coordinate amongst member bodies to prevent further regulatory issues.1 Additional challenges may also be discovered in Szego’s push to seek out beneficial ownership information when it comes to crypto asset service providers and those holding stakes within these companies. For this, the AMLA is reportedly considering a comprehensive review of Europe’s respective national authorities as they pertain to crypto-risk management, as well as the potential integration of novel financial intelligence units for purposes of improved oversight across national borders.
US Doubles Down on Crypto-Friendly Approach
In contrast to the approach taken across the pond, the United States under President Donald Trump has pursued a much more openly pro-crypto agenda. Last Thursday, the U.S. House of Representatives passed a landmark bill coined the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) which establishes bank-like regulations for the $250 billion stablecoin market while barring them from lending activities. The act also includes additional provisions for consumer protection. Stablecoins are viewed by many as a safer type of cryptocurrency given that the companies selling stablecoins have to hold the equivalent dollars in reserve and as such serve as a means for faster and safer money transfers, while also allowing consumers to avoid traditional bank and money transfer fees associated with these transactions.3 The GENIUS Act is the first major crypto legislation ever passed by Congress, and now reaches the President’s desk for final approval. This measure joins the CLARITY Act, which establishes market structure rules for assets overseen by the SEC or CFTC, and the “Anti-CBDC Surveillance State Act” which aims to restrict the creation of a central bank digital currency, as three crypto-related pieces of legislation passed in the U.S. in July alone.
The Trump Administration also announced another bullish development affecting this space last week, with the President set to sign an executive order that would effectively open the $9-trillion U.S. retirement market to alternative investments (beyond traditional stocks and bonds), including cryptocurrencies, precious metals, and private equity. This move would potentially allow 401k plans to include digital assets, potentially channeling billions worth of new investor funds into the sector. The executive order however would only instruct Washington regulatory agencies to begin to investigate the remaining hurdles needed to allow for such alternative investments to be included in professionally managed funds used by 401k savers in this current phase.2
While these moves certainly accelerate the potential of mainstream adoption of decentralized currencies, they also bring about a plethora of new questions. The Financial Times writes that this major policy shift will heavily benefit private capital giants like Blackstone, Apollo, and BlackRock, which are already partnering with asset managers like Vanguard and Empower to offer private investments in 401k plans. While these behemoth’s anticipate that these new ventures will attract hundreds of billions in new assets, many on the sidelines have already voiced concerns over the potential for higher fees, illiquidity, and reduced transparency compared to dealings in traditional stocks and bonds.
Despite these new risks, many of the world’s top financial powers continue to explore the crypto-space and invest in these markets at unprecedented levels. As crypto assets gain more widespread traction, 2025 is developing into a pivotal year for the health of this market moving forward. Nevertheless, it remains up to our respective national governments to decide if fostering innovation in this space remains viable while mitigating the ever-increasing financial crime risks associated with these moves.
Citations
- Arnold, Martin. Crypto Is Top Money Laundering Threat, Warns New EU Watchdog, Financial Times, 15 July 2025.
- John, Jamie, et al. Donald Trump Set to Open Us Retirement Market to Crypto Investments, Financial Times, 17 July 2025.
- Nam, Rafael. “A ‘crypto Week’ Win: Congress Passes 1st Major Crypto Legislation in the U.S.” NPR, NPR, 17 July 2025.