Cryptocurrency regulation refers to the rules that govern how digital assets are issued, traded, stored, and integrated into financial systems. While regulations vary by country, they seek to balance innovation with investor protection, financial transparency, and system stability.
In the United States, for example, a range of federal and state regulatory agencies have created different crypto regulations. For instance, the Commodity Futures Trading Commission has primary jurisdiction over digital commodities—blockchain-based assets that are not classified as securities—under a recent law known as the CLARITY Act, while the Securities and Exchange Commission (SEC) retains control over tokens that qualify as securities. Meanwhile, the Internal Revenue Service (IRS) treats cryptocurrency as property for tax purposes and requires taxable transactions to comply with anti-money laundering and Know Your Customer standards.
Despite these varying approaches, many states are using forward-thinking laws to encourage blockchain innovation and protect consumers. The New York Department of Financial Services notably launched a crypto regulatory framework that uses BitLicensees to self-certify businesses and ensure compliance. The DFPI’s approach provides a streamlined reading of existing state money transmission laws to create a regulatory system that minimizes bureaucracy for market participants.
In addition, the SEC and CFTC host roundtables to discuss important issues around digital asset custody, tokenization, and decentralized finance. These conversations help to promote a collaborative approach to regulation and are a sign of a maturing industry. Yet, establishing consistent global standards for cryptocurrency regulation remains challenging. Achieving this will require more cooperation across national borders and a shared understanding of how cryptocurrencies can advance the world.