The cryptocurrency market is inherently global due to its decentralised nature, but regional regulatory frameworks still govern its use and trade around the world. As it is still a developing market that makes the most of rapidly changing technology, regulations must be flexible enough to move with developments.
The start of 2025 saw cryptocurrency in one of the best positions it has been in for some time. The culmination of greater global acceptance by businesses and consumers, technological developments, and a suitable political climate saw some cryptocurrencies, including Bitcoin, enjoy record growth and reach new high values.
As with any bull market, this has seen greater interest and opportunity for investors and an increase in the development of new projects hoping to make the most of the market confidence.
A new crypto presale can generate a lot of interest and excitement, as every newly launched coin is yet to stand the test of the market; if you appear on time, you might add a valuable new asset to your portfolio; and 2025 could be a great year for developers and investors who back new projects with potential.
However, it is worth noting that regulatory change is coming which should help to create a more stable market with clarity for everyone involved. As regulations can change based on different regions, it could impact how a new project approaches the market and how tradable it will become.
The UK Becoming a Crypto Trailblazer
In late 2024, the UK government confirmed its intention to go ahead with HM Treasury’s crypto regulation proposals. This came as a relief for those seeking clarity with the paper initially being published in October 2023.
The purpose of the paper was to focus on the second phase of cryptocurrency regulation which relates to the extension of the existing regulatory framework for traditional investments to include cryptoassets. This would help to create a regime for public offers and potential market abuse in the cryptoasset sphere.
There were initial plans to carry out two phases which would see the regulation of stablecoins come first before the broader phase was implemented, but this now appears to be going through as a single phase. The government has also moved against the addition of stable coins into the existing UK payment regulations at present.
The Treasury is also set to clarify that staking services won’t constitute collective investment schemes in all cases.
The FCA (Financial Conduct Authority) has set a timescale of early 2025 to enter discussion with firms regarding draft legislation.
A DP is expected over Q1 or Q2 that will cover the rules concerning trading platforms, lending rules, prudential considerations, staking, and intermediation. A similar timeframe is expected for a consultation paper that will explore stablecoins.
Q3 should see a consultation paper covering firm standards and conduct for Regulated Activities Orders as well as market abuse, admissions, and disclosures.
Q4 leading into Q1 of 2026 will see a consultation paper covering lending, staking, intermediation, and trading platforms with the publication of all final rules set to be published in 2026.
The US Starting a New Era
The US crypto industry is set for massive changes in 2025 with the incoming Trump administration keen to position the country as the world’s crypto capital. This is in contrast to how the Biden administration approached crypto, with several moves impacting how businesses could operate.
The Federal Deposit Insurance Corporation has been accused of implementing restrictions on crypto firms by advising traditional banking services to hold off from allowing crypto-asset services in a move that has been dubbed “Operation Chokepoint 2.0”.
Trump positioned himself as an ally to the crypto industry during his election campaign and looks set to follow through with promises by creating new crypto and tech-related roles in the White House.
Discussions are being held to create an advisory council dedicated to prioritising the crypto industry. David Sacks has also been named in the first crypto role of the White House, AI and Crypto czar.
Sacks history in investment and spending time as the PayPal COO will serve him well in this new role, and the crypto marketplace has been buoyed by his appointment.
The advisory role will work in conjunction with Congress in dealing with AI and crypto concerns. The position underlines the intention to follow through on campaign pledges that will help the crypto industry progress in the US.
The planned removal of SEC chair Gary Gensler is no longer relevant following his decision to retire in 2025. Under Gensler, the SEC has failed to issue crypto-specific rules and he was quoted as saying crypto was a “speculative volatile asset” and that it was being used for “illicit activity”.
