Potential Divergences in 2025 Crypto Policies Between EU and US
As we enter 2025, the landscape of digital asset policy in both the United States and Europe is facing significant divergence. The implications of these policy decisions are crucial, especially against the backdrop of increased pressure on the global dominance of the US dollar and Europe’s growing focus on achieving “economic sovereignty” in local payment systems.
The European Union (EU) has taken a consistent stance on digital currency regulation, particularly with the enforcement of the Markets in Crypto-Assets Regulation (MiCAR) at the end of 2024. This regulation, along with other existing frameworks such as the Transfer of Funds Regulation and the Digital Operational Resilience Act, extends traditional banking rules to cover stablecoins and cryptocurrencies. The primary goal of MiCAR is to address financial stability and consumer protection risks associated with cryptocurrencies, which are predominantly mined outside of the EU. Notably, the European Central Bank (ECB) has voiced its preference for Central Bank Digital Currencies (CBDC), like the digital euro, to uphold strategic autonomy and monetary sovereignty for EU businesses and individuals.
For companies engaging in the issuance, marketing, and trading of crypto assets in the EU, compliance with MiCAR is mandatory. These entities must adhere to stringent regulatory requirements similar to those imposed on traditional financial institutions, including maintaining adequate internal risk management protocols and meeting minimum capital thresholds. The nascent crypto industry in the EU has welcomed this regulatory framework as it provides a clear legal framework and certainty for their operations.
In contrast, the United States has witnessed a more tumultuous trajectory in its digital currency policy from 2021 to 2024. Market expansion, political discord, and concerns over fraudulent activities have prompted a series of regulatory shifts in the US. The country has oscillated between supporting both cryptocurrencies and CBDCs to adopting a strict regulation-by-enforcement approach that faced legal challenges. The recent change in administration has signaled a clear shift towards a pro-blockchain, anti-CBDC stance. The new executive order under the Trump administration explicitly opposes CBDCs, citing threats to financial stability, individual privacy, and US sovereignty. Instead, the US is championing the use of “lawful and legitimate” stablecoins to safeguard the sovereignty of the US dollar.
At the legislative level, both the House of Representatives and the Senate have put forward bills addressing stablecoins, with a focus on regulatory compliance and investor protection. The White House has elevated digital finance policy formation to a national level through the establishment of the Working Group on Digital Asset Markets. Additionally, regulatory bodies like the Commodity Futures Trading Commission (CFTC) have accelerated efforts to broaden the use of digital assets beyond traditional financial sector boundaries.
The divergence in digital asset policies between the EU and the US underscores the broader global debate on financial regulation, monetary sovereignty, and the future of digital finance. As these two major economic blocs chart distinct paths in digital currency regulation, the implications for global financial markets and the broader economy remain paramount.
