World economies still lag in implementing comprehensive crypto regulations

NEW YORK

Despite the rising popularity and price of Bitcoin and other cryptocurrencies, most countries remain behind in establishing comprehensive regulatory frameworks for crypto assets, according to a new report.

Bitcoin, the world’s largest cryptocurrency, has brought crypto regulations into global focus, with both its record-breaking price trend and the optimism arising from Congress’ efforts to establish stablecoin legislation.

Cryptocurrencies have become a staple of the global financial system since their emergence in 2008. However, their potential risks to markets, investors, and even the environment have prompted international debate and increased calls for stronger oversight.

According to a study by the Atlantic Council, a Washington-based think tank, 45 of 75 surveyed countries—including many G20 nations—have legalized crypto assets to varying degrees. Twenty countries have imposed partial bans, while 10 have enacted outright prohibitions.

Among the G20 economies, cryptocurrencies are legal in 12 countries, representing about 57% of the world’s gross domestic product (GDP). Currently, all G20 nations are considering implementing regulations on crypto assets.

Both developing and developed economies lag behind in implementing comprehensive regulations. According to the Atlantic Council report, only 27 countries, including the Hong Kong Special Administrative Region (SAR), have implemented taxation, anti-money laundering, counter-terrorism financing, consumer protection, and licensing regulations.

The UK, Hungary, Denmark, the United Arab Emirates, Japan, the Philippines, Malta, Australia, Chile, Kazakhstan, Serbia, Romania, the Netherlands, Singapore, the US, Ireland, France, Nigeria, Switzerland, South Africa, Argentina, South Korea, Brazil, Italy, Czechia, Thailand, and Canada make up these 27 countries.

Only six developing countries have adopted a full set of regulations.

Despite ongoing debates about cryptocurrency regulation, the US remains the only developed economy in the top 10 for crypto adoption.

After winning his second term, US President Donald Trump issued executive orders that paved the way for the country's adoption of crypto assets.

The second Trump administration's emphasis on fintech innovation and regulations is expected to increase crypto trading volumes while influencing the adoption of regulatory frameworks worldwide.

The Senate is preparing to set a dollar-backed stablecoin legislation this week, as stablecoin regulations come into effect in the EU and Japan.

The UK is also discussing regulatory proposals, while some emerging markets, such as Brazil and Hong Kong SAR, are in the process of developing stablecoin regulations of their own.

- Crypto bans do not prevent adoption

Crypto bans prove ineffective even in countries with partial or general restrictions on cryptocurrencies, according to the Atlantic Council.

Over 90% of the 75 countries covered in the report are in the process of pursuing central bank digital currency projects, along with implementing crypto regulations.

In January, however, Trump signed an executive order to prohibit US agencies from developing, issuing, or using central bank digital currencies.