2025 Global Crypto Regulatory Map: The Beginning of the Integration Era, a Year of "Convergence" between Crypto and TradFi

Author: imToken

Objectively speaking, for Crypto/Web3, 2025 will undoubtedly be the most pivotal year in the past decade.

If the past ten years were characterized by the “barbaric growth” of the crypto industry on the fringes of mainstream finance, then 2025 marks the inaugural year of this species’ formal “legalization evolution”:

From stablecoins to RWA, from Washington’s policy U-turns to the finalization of rules in Hong Kong and the EU, the global regulatory logic is undergoing an epic paradigm shift.

1. United States: Crypto Enters a Systemic Reprieve

For a considerable period, US regulation of the crypto industry resembled a tug-of-war lacking consensus.

Most notably under the Gary Gensler era of the US Securities and Exchange Commission (SEC), enforcement actions were frequently used to define the legal boundaries of crypto assets. Prosecutions, investigations, and deterrence became the main themes. This “enforce-first, define-later” regulatory approach not only plunged many developers and entrepreneurs into an environment of high uncertainty but also kept the entire industry under long-term pressure.

However, with the inauguration of the new government in 2025, this situation has undergone a fundamental reversal. Washington no longer attempts to force crypto assets into the old securities law system originating in the 1930s but instead begins to openly recognize their status as a “new hybrid asset” distinct from traditional securities, commodities, and currencies.

The highlight of this shift was the formal signing of the “GENIUS Act” in July 2025. This legislation not only established a federal-level stablecoin regulatory framework requiring issuers to hold 100% high-liquidity reserves (such as cash or US Treasuries) but also explicitly granted token holders priority claims in the event of issuer bankruptcy. This means that the on-chain form of the US dollar is now being incorporated into the national legal framework for the first time.

In response, in 2025, the US also established a “National Digital Asset Reserve” via executive order, listing previously confiscated Bitcoin as a strategic asset. This move fundamentally changed Bitcoin’s position in global asset pricing, elevating it from a “marginal alternative asset” to part of the national strategic game.

Of course, this shift was not accidental. With the appointment of the new SEC Chair Paul Atkins, the long-standing “enforcement-style regulation” was declared over. Investigations and charges against projects like Coinbase (COIN.M), Ripple, Ondo Finance, and others were gradually withdrawn or downgraded, returning crypto from enforcement targets to the policy discussion table.

Meanwhile, the new government’s core team also demonstrated unprecedented alignment with tech and crypto capital—ranging from Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, to National Intelligence Director Tulsi Gabbard—bringing decision-makers who explicitly support AI, Web3, and new financial technologies into the power core. Crypto is no longer an “outsider” in the political system.

Interestingly, on December 2, SEC Chairman Paul Atkins announced at the New York Stock Exchange that the “era of enforcement regulation targeting the crypto industry for years has ended, and the SEC will usher in a new compliance era starting January 2026.”

This new policy, called “Innovation Exemption,” also marks a shift from passive case-by-case enforcement to establishing a “compliance sandbox” with clear entry standards. According to the “Project Crypto” plan disclosed in November, qualifying DeFi protocols and DAO organizations will receive a compliance buffer of 12 to 24 months. During this period, project teams can operate without the burdensome S-1 securities registration, only submitting simplified information.

This mechanism thoroughly resolves the long-standing dilemma where startups could not afford high compliance costs but faced accusations due to lack of registration. Meanwhile, the new asset classification law refines digital assets into commodity-type, functional, collectible, and tokenized securities, providing a clear legal exit for assets that can demonstrate “full decentralization.”

In summary, the regulatory signals from the US in 2025 are sufficiently clear: Crypto is no longer a systemic risk to be suppressed but a rule-integrated, steerable institutional variable.

2. EU, China Hong Kong, Japan: The Establishment of a Multipolar Order

While the US completed its policy reversal, other major economies did not follow a lenient path but instead charted three distinct yet similarly consolidating regulatory trajectories.

European Union

First, the EU. 2025 is the first full year after the comprehensive implementation of the Markets in Crypto-Assets Regulation (MiCA) (which officially took effect in mid-2024). As is well known, MiCA’s core goal is not to stimulate innovation but to exchange unified rules for financial stability and cross-border controllability. For example, through the “passport” licensing system, compliant crypto service providers can operate freely across the 27 member states, but at the cost of significantly higher compliance thresholds.

Against this backdrop, in 2025, to meet MiCA’s strict requirements for audit transparency, transparent supervision, and high capital reserves, many small and medium-sized VASPs (Virtual Asset Service Providers) were forced to exit the European market due to inability to bear compliance premiums. Some leading DEXs also temporarily removed front-end trading functions in Europe because they could not meet specific identity verification requirements.

On the stablecoin front, the EU also demonstrated strong “currency protectionism,” especially by imposing strict daily trading limits and reserve requirements on non-Euro stablecoins. This objectively erected a barrier at the retail level in Europe, prompting liquidity to flow back into compliant Euro stablecoins like EuROC.

Hong Kong

Contrasting with the EU’s defensive stance, Hong Kong displayed a highly aggressive approach in 2025. With the official enactment of the Hong Kong Stablecoin Ordinance on August 1, 2025, fiat-backed stablecoins were formally incorporated into the licensing system, marking Hong Kong’s transformation from a retail trading hub to a global institutional asset clearing center.

Hong Kong’s strategic intent is very clear: it is no longer just a platform for buying and selling crypto assets but an Asian institutional interface connecting Chinese capital, international capital, and on-chain finance. This year, Hong Kong actively promoted the tokenization of RWA, aiming to bring traditional assets like government bonds and trade finance onto the blockchain for global settlement.

More intriguingly, Hong Kong and Mainland China have distinct functional roles in Web3. According to recent Caixin reports, Hainan Free Trade Port and Hong Kong form a complementary relationship: Hainan, as a trade hub for domestic and international trade, focuses on physical trade and data flow; while Hong Kong acts as a financial testing ground, handling high-pressure tests such as Bitcoin strategic reserves and cross-border stablecoin payments.

This “front shop, back factory” model enables Hong Kong to be the only global node in 2025—and into 2026—that can reach both traditional Chinese capital and seamlessly access Web3-native liquidity.

Japan

In contrast, Japan’s regulatory path appears more restrained. Historically, Japan managed exchanges, custody, and intermediary services through detailed segmentation. After the 2018 crackdown and a tax rate as high as 55%, many developers viewed Japan as a crypto desert.

However, recently, Japan’s FY2026 tax reform outline proposed gradually positioning crypto assets as “financial products that help build national wealth,” exploring separate taxation for spot, derivatives, and ETF trading gains. The tax rate could sharply drop from the 55% ceiling to around 20%, comparable to stocks, and allow up to 3 years of loss carryforward.

This is likely to activate Japan’s large retail and institutional markets. Coupled with the removal of the ban on Bitcoin spot ETFs and the issuance of the first stablecoin operation licenses to giants like Circle and SBI, Japan is objectively attempting to leverage its mature compliance system to regain its long-lost influence in Asian crypto finance.

3. After “Reintegration”: The Shakeout of Stablecoins and the Repositioning of Web3

Looking globally, the dominant theme of regulation in 2025 is “reintegration.”

Regulators have deeply realized that the decentralization financial power embedded in crypto technology cannot be completely eradicated. Therefore, the most effective governance strategy is to deconstruct, absorb, and ultimately incorporate this logic into the existing global financial landscape.

This reintegration does not deny the value of Crypto; on the contrary, it implies that regulators have implicitly accepted that crypto technology is efficient, irreversible, and worth preserving—provided it is embedded within understandable, auditable, and accountable institutional structures.

As a result, this regulatory shift produces an unprecedented dual effect. On one hand, there is a rapid return of liquidity and credit, as compliant identities encourage massive capital inflows and institutional allocations. On the other hand, it prompts a profound reflection on the original spirit of Web3: when rules become the premise, how much decentralization remains?

In this paradigm shift, stablecoins are the first and most typical pressure point.

The reason is simple. As the infrastructure most intertwined with both Crypto and TradFi, stablecoins are naturally at the center of regulators’ attention. They connect fiat currencies, influence payments, participate in clearing, and are deeply embedded in DeFi and on-chain liquidity systems.

Therefore, 2025 has seen stablecoins enter an epic reshuffle.

In July, US President Trump signed the “GENIUS Act,” marking the legislative breakthrough for stablecoins; in August, Hong Kong’s Stablecoin Ordinance also took effect, becoming the world’s first regional regulatory framework; simultaneously, major economies like Japan and South Korea are accelerating their regulatory details, planning to allow compliant entities to issue stablecoins.

In other words, the stablecoin track has entered a genuine “regulatory window”—evolving from a gray liquidity tool to a financial infrastructure with parallel compliance and experimentation (see also “Gray Giant vs. Whitelisted Players: A Perspective on the ‘Forking Moment’ Brought by Compliant Stablecoins”).

In this process, the track will inevitably diverge. One side involves institutional stablecoins included in whitelisted systems, assuming payment and clearing functions; the other side continues serving native on-chain finance, emphasizing censorship resistance and self-custody. These will not simply be mortal enemies but will serve entirely different scenarios and user groups.

The real change is that stablecoins are being asked for the first time: what part of the financial system do you want to become?

This is also the question that other Crypto/Web3 tracks will need to answer in 2026.

Conclusion

2025 is undoubtedly a year of clear turning points.

Regulation is no longer a vague, confrontational, passive presence but begins to systematically shape the structure, boundaries, and development path of the crypto industry. From the US to the EU, from Hong Kong to Japan, rules are rapidly completing their institutional absorption of Crypto.

But we must also soberly recognize:

Compliance is merely a means, not the ultimate goal of Web3.

In this global process of reintegration and restructuring, discerning which noises will be washed away by the times and which are the true foundations carrying the future will be a compulsory lesson for every Web3 participant.

Regulation is no longer the “enemy” of the crypto industry but a stepping stone toward a market scale of tens of trillions of dollars.