Global Encryption Regulatory Landscape: Convergence and Divergence Coexist

In recent years, as the encryption market has increasingly gained attention, countries have been introducing regulatory policies one after another. From the ongoing games between the U.S. SEC and encryption companies, to the EU's MiCA legislation, and to the weighing of innovation and risk in emerging economies, the global landscape of encryption regulation presents an unprecedented complexity and diversity. This article will unfold a world map of encryption regulation and explore the hidden contexts behind this global wave of regulation.

Asia

Greater China Region

Hong Kong, China

Hong Kong views encryption assets as "virtual assets" rather than currency, regulated by the Securities and Futures Commission (SFC). The Anti-Money Laundering Ordinance was amended in 2023, requiring cryptocurrency exchanges to obtain licenses. The SFC is responsible for issuing licenses, and several institutions have already obtained licenses, while others are in the application process. Licensed exchanges can serve retail investors. Bitcoin and Ethereum ETFs were listed in Hong Kong in 2024.

Hong Kong aims to consolidate its position as an international financial center by actively embracing Web3 and virtual assets. Against the backdrop of a complete ban on encryption in mainland China, Hong Kong has chosen a different path, actively building a regulated virtual asset market. Allowing retail participation and launching ETFs are key measures to attract global encryption capital and talent, enhancing market liquidity and international competitiveness.

Taiwan

Taiwan maintains a cautious attitude towards encryption currency, not recognizing its monetary status, but regulating it as a speculative digital commodity. The Financial Supervisory Commission ( FSC ) is the regulatory authority. In March 2025, it announced the drafting of laws targeting Virtual Asset Service Providers ( VASP ), aiming to shift from a basic registration framework to a comprehensive licensing system.

Mainland China

Mainland China has imposed a comprehensive ban on the trading of encryption assets and all related financial activities. The People's Bank of China believes that cryptocurrencies disrupt the financial system and facilitate illegal activities. Since 2013, banks in mainland China have been prohibited from engaging in cryptocurrency business. In September 2021, the People's Bank of China issued a notice prohibiting all services related to settlement with virtual currencies and providing information to traders.

However, in judicial practice, virtual currencies have corresponding property attributes, and there is basically a consensus in both civil and criminal fields. Some cases cite Article 127 of the Civil Code, determining that virtual currencies are a specific type of virtual property and should be protected by law.

Singapore

Singapore regards encryption assets as "payment instruments/goods." The Financial Services and Markets Act enacted in 2022 regulates exchanges and stablecoins. The Monetary Authority of Singapore (MAS) has issued three types of licenses for crypto businesses: money exchange, standard payment, and major payment institutions, with over 20 institutions currently licensed.

South Korea

South Korea regards encryption assets as "legal assets," but not legal tender. The draft of the "Digital Asset Basic Law" (DABA) is currently being promoted. South Korea implements a real-name trading exchange licensing system, and currently, 5 major exchanges have obtained licenses. The South Korean market is mainly dominated by domestic exchanges and prohibits foreign exchanges from directly servicing South Korean residents.

Indonesia

Indonesia is undergoing a change in the regulatory authority over encryption assets from the Commodity Futures Trading Regulatory Agency ( Bappebti ) to the Financial Services Authority ( OJK ). The OJK Regulation No. 27 of 2024 will take effect on January 10, 2025, setting strict requirements for digital asset exchanges, clearinghouses, custodians, and traders. All digital financial asset trading providers must fully comply with the new regulations by July 2025.

Thailand

Thailand allows the possession, trading, and mining of encryption currency, and exempts capital gains tax on cryptocurrency sales income for five years when conducted through licensed cryptocurrency asset service providers. The Thailand Securities and Exchange Commission ( SEC ) is responsible for regulating the encryption market. Exchanges must obtain official licenses and must register as Thai companies. The SEC has taken measures against global cryptocurrency exchanges that do not hold local licenses to prevent them from operating in Thailand.

Japan

Japan is one of the first countries in the world to explicitly recognize the legal status of encryption currency. The "Payment Services Act" recognizes encrypted assets as "legitimate means of payment." The Financial Services Agency (FSA) is responsible for regulating the encryption market, and there are currently 45 licensed institutions. The Japanese market is mainly dominated by local exchanges, and international platforms usually need to enter through joint ventures.

Europe

( EU

The European Union has established a unified regulatory framework through the Regulation on Markets in Crypto-Assets (MiCA) ). MiCA defines crypto assets as "legal payment instruments, but not legal tender." The regulation will come into full effect on December 30, 2024, applicable to 30 countries in Europe. MiCA adopts a "single license, universal application" model, greatly simplifying the compliance process.

UK

The UK regards encryption assets as "personal property." The Financial Services and Markets Bill (2023) has brought encryption assets under regulatory oversight. The Financial Conduct Authority ###FCA( is responsible for issuing relevant licenses. Currently, there is no mandatory cryptocurrency exchange license in the UK, but encryption asset businesses must register with the FCA and comply with anti-money laundering regulations.

) Russia

Russia classifies encryption assets as "property" for the purpose of confiscation, while also declaring that they "are not a means of payment." Two bills related to encryption mining will be implemented starting in October and November 2024, introducing legal definitions and registration requirements for mining operations. However, by the end of 2024, only 30% of encryption miners have registered with the Federal Tax Service.

( Switzerland

Switzerland has always been at the forefront of cryptocurrency regulation. Crypto assets are legal in Switzerland but are not considered legal tender. The Blockchain Act passed in 2020 comprehensively defines token rights. The Financial Market Supervisory Authority )FINMA### is responsible for issuing licenses for virtual asset service providers ###VASP(. Zug has also piloted a "crypto-friendly" regulatory sandbox.

Americas

) United States

The regulatory landscape for encryption assets in the United States exhibits significant interstate differences and a lack of unified legislation at the federal level. At the federal level, the IRS( views encryption assets as "property". The SEC) primarily regulates tokens based on securities laws. New York has a strict BitLicense licensing system. The GENIUS stablecoin bill is currently under review.

El Salvador

El Salvador recognized Bitcoin as legal tender in 2022, but later abandoned it due to pressure from the International Monetary Fund (IMF). Currently, Bitcoin is legally not a legal tender, but private use is still allowed. El Salvador enacted the Digital Asset Issuance Law (2024), with the National Digital Asset Commission ###NCDA( responsible for regulation.

) Argentina

Argentina allows the use and trading of encryption currency, but does not consider it as legal tender. The law No. 27739 enacted in 2024 incorporates virtual asset service providers (VASP) into the legal and financial framework. Starting from 2024, VASP must register with Argentina's financial regulator, Comisión Nacional de Valores(CNV), to provide encryption services.

Middle East

UAE

The UAE has taken a positive stance towards encryption currency and blockchain technology. The Dubai Virtual Assets Regulatory Authority ( VARA ), the Dubai Financial Services Authority ( DFSA ), and the Abu Dhabi Global Market ### ADGM ( have jointly established a comprehensive regulatory framework. This collaborative regulatory approach ensures that digital assets are integrated into the legal system, promoting innovation while preventing abuse.

) Saudi Arabia

Saudi Arabia adopts a cautious attitude towards encryption, which is largely influenced by Islamic law. The banking system completely prohibits the use of encryption. The Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority (CMA) emphasize a "cautious approach" to encryption innovation. The country is actively promoting blockchain adoption and participating in CBDC pilot projects.

Bahrain

Bahrain is a pioneer in cryptocurrency and blockchain regulation in the Middle East. The Central Bank of Bahrain (CBB) under the "Capital Markets Rules Handbook" has established a comprehensive regulatory framework with the "Crypto Asset Module" (CRA). Engaging in regulated crypto asset services within Bahrain requires a CBB crypto asset license, covering services such as order processing and trading.

Israel

Israel has no specific comprehensive laws on encryption currency, and for tax purposes, encryption currencies are viewed as assets rather than currency. The Capital Markets Authority (CMA) is the regulatory body, requiring virtual currency brokers and custodians to be licensed. The Securities Authority (ISA) regulates activities related to encryption currency securities. The Bank of Israel is studying the "digital shekel" and will launch tests in 2024.

Africa

Nigeria

Nigeria's cryptocurrency regulation has undergone a transition from restriction to formal regulation. In December 2023, the Central Bank of Nigeria (CBN) lifted restrictions on cryptocurrency trading. The Securities and Exchange Commission (SEC) regards crypto assets as securities unless proven otherwise. The SEC's Digital Asset Rulebook provides statutory support for the regulation of VASPs.

South Africa

South Africa regards encryption assets as financial products rather than legal tender. The Financial Sector Conduct Authority (FSCA) is the main regulatory body for encryption service providers. The licensing process for encryption asset service providers (CASP) was initiated in 2023. CASPs are officially designated as responsible entities under the Financial Intelligence Centre Act ###FICA( and are required to comply with strict anti-money laundering and counter-terrorism financing requirements.

Summary

The global cryptocurrency regulatory landscape is undergoing continuous evolution, showing a coexistence of convergence and divergence. Anti-money laundering ) AML ( and counter-terrorism financing ) CFT ( have become common consensus and core requirements. The EU's MiCA is becoming an important reference for other jurisdictions. Regulatory authorities generally prefer to implement classified regulation based on the functions and economic substance of cryptocurrency assets.

However, the legal status of encryption assets still varies greatly around the world. From complete prohibition to being recognized as a legitimate payment tool, the fundamental legal classifications of encryption assets differ significantly from country to country. This disparity creates a complex legal environment and compliance challenges for global encryption companies operating across borders.

The main challenges facing global cryptocurrency regulation include: difficulties in cross-jurisdictional coordination, the speed of technological development outpacing regulation, and the ongoing struggle to balance innovation and risk. Nevertheless, global cryptocurrency regulation is moving towards a more mature and refined direction, but its inherent complexity and dynamism, as well as the differences in national circumstances, will continue to be an important backdrop for the development of the global cryptocurrency market in the coming years.