Author: imToken
Objectively speaking, 2025 is definitely the most pivotal year in the past decade for Crypto/Web3.
If the past decade was the "wild growth" of the crypto industry on the fringes of mainstream finance, then 2025 is the year this species officially completes its "legal evolution":
From stablecoins to RWA, from Washington's policy abrupt turn to the finalization of rules in Hong Kong and the EU, global regulatory logic is undergoing an epic paradigm shift.
I. The United States: Crypto Welcomes Institutional Rehabilitation
For a considerable period, the regulation of the crypto industry in the United States was more like a tug-of-war lacking consensus.
The U.S. Securities and Exchange Commission (SEC) during Gary Gensler's era, in particular, frequently used enforcement actions 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 a large number of developers and entrepreneurs into a highly uncertain environment but also kept the entire industry under constant pressure. However, with the new administration taking office in 2025, this situation underwent a fundamental reversal. Washington no longer attempted to forcibly force crypto assets into the old securities law system born in the 1930s but began to openly acknowledge their status as a "new type of hybrid asset" different from traditional securities, commodities, and currencies. The highlight of this shift was undoubtedly the formal signing of the GENIUS Act in July 2025. This act not only established a federal-level regulatory framework for stablecoins, requiring issuers to hold 100% highly liquid reserves (such as cash or US Treasury bonds), but more importantly, it clarified that stablecoin holders have priority in claims in the event of an issuer's bankruptcy. This meant that the on-chain form of the US dollar was incorporated into the national institutional framework for the first time. Correspondingly, in 2025, the United States also established a "National Digital Asset Reserve" through an executive order, classifying previously confiscated Bitcoin as a strategic asset. This move completely changed Bitcoin's position in global asset pricing, transforming it from a "marginal alternative asset" into part of national strategic competition. Of course, this shift was not accidental. With the appointment of the new SEC Chairman Paul Atkins, the long-standing "enforcement-style regulation" that had plagued the market came to an end. Long-term investigations and accusations against projects such as Coinbase (COIN.M), Ripple, and Ondo Finance were successively withdrawn or downgraded, and cryptocurrencies officially returned to the policy discussion table from being targets of enforcement. At the same time, the new government's core leadership also exhibited an unprecedented high degree of overlap with technology and crypto capital—from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to Director of National Intelligence Tulsi Gabbard, a group of policymakers who explicitly support AI, Web3, and new financial technologies entered the center of power, and crypto assets are no longer an "outlier" in the political system. Interestingly, on December 2nd, Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), officially announced in a speech at the New York Stock Exchange the end of years of "enforcement regulation" targeting the crypto industry, stating that the SEC will usher in a new era of compliance in January 2026. This new policy, known as the "innovation exemption," also marks a shift in U.S. regulators from passively cracking down on individual cases to establishing a "compliance sandbox" with clear entry standards. According to the "Project Crypto" plan disclosed in November, eligible DeFi protocols and DAO organizations will receive a compliance buffer period of 12 to 24 months. During this period, projects will not need to undergo cumbersome S-1 security registration; they only need to submit a simplified version of the information to operate. This mechanism completely solves the long-standing vicious cycle that has plagued the industry: startup protocols cannot afford high compliance costs but face accusations due to lack of registration. At the same time, the new asset classification law refines digital assets into commodity-type, utility-type, collectible-type, and tokenized securities, providing a clear legal exit for assets that can prove "full decentralization." In short, the regulatory shift in the US by 2025 is clear enough: Crypto is no longer a systemic risk that needs to be suppressed, but rather an institutional variable that is incorporated into rules and can be guided. II. The EU, Hong Kong, and Japan: The Establishment of a Multipolar Order While the US completed its policy reversal, other major economies did not choose to follow suit with easing, but instead embarked on three distinct regulatory paths, all pointing towards co-optation. The EU First, there's the EU. 2025 will be the first full year after the full implementation of the EU's Crypto Asset Markets Act (MiCA) (officially implemented in mid-2024). As is well known, MiCA's core objective is not to incentivize innovation, but to exchange unified rules for financial stability and cross-border controllability. For example, through a "passport system" of licensing, compliant crypto service providers can operate freely in the 27 member states, but at the cost of significantly raised compliance thresholds. It is against this backdrop that, in 2025, to meet MiCA's stringent audit transparency, penetrating supervision, and extremely high capital requirements, a large number of small and medium-sized virtual service providers (VASPs) were forced to withdraw from the European market due to their inability to bear the compliance premium. Even some leading DEXs temporarily suspended their front-end trading functions in Europe because they could not meet specific identity verification requirements. At the stablecoin level, the EU also demonstrated strong "monetary protectionism," especially by setting strict daily trading limits and reserve requirements for non-euro stablecoins, objectively building a barrier on the European retail side and forcing liquidity to flow back to compliant euro stablecoins (such as EuROC). Unlike the EU's defensive stance, Hong Kong demonstrated a highly aggressive approach in 2025. With the formal implementation of the Hong Kong Stablecoin Ordinance on August 1, 2025, fiat-pegged stablecoins were officially incorporated into the licensing system, marking Hong Kong's transformation from a retail trading center to a global clearing center for institutional assets. Hong Kong's strategic intent is very clear: it is no longer merely a platform for buying and selling crypto assets, but an Asian institutional interface connecting Chinese and international capital with on-chain finance. Therefore, this year Hong Kong has significantly promoted the tokenization of RWA, aiming to introduce traditional assets such as government bonds and trade finance into the global arena through on-chain clearing. More significantly, Hong Kong and the mainland have different functions in Web3. According to the latest Caixin report, the Hainan Free Trade Port and Hong Kong complement each other: Hainan, as a trade hub facing both domestic and international markets, focuses on physical trade and data flow; while Hong Kong, as a financial testing ground, undertakes high-pressure testing tasks such as Bitcoin strategic reserves and cross-border stablecoin payments. This front-end-back-end model makes Hong Kong, in 2025 and beyond, the only unique node in the world that can both reach traditional Chinese capital and seamlessly access Web3's native liquidity. In contrast, Japan's regulatory path appears more restrained. Previously, it had long relied on segmented management of exchanges, custody, and intermediaries, and its extremely stringent regulations and comprehensive tax rate of up to 55% after 2018 have led developers to view it as a crypto desert. However, Japan's recent 2026 fiscal year tax reform outline proposed gradually positioning crypto assets as "financial products that contribute to the formation of national assets," exploring separate taxation for spot, derivatives, and ETF trading gains, potentially drastically reducing the tax rate from a 55% ceiling to 20%, on par with stocks, and introducing a loss carryforward period of up to three years. This could directly revitalize Japan's massive retail and institutional market. Coupled with Japan's lifting of the ban on Bitcoin spot ETFs and the issuance of the first batch of stablecoin operating licenses to giants like Circle and SBI, objectively speaking, Japan is attempting to leverage its mature compliance system to reclaim its long-lost voice in Asian crypto finance. III. After "Incorporation": The Reshuffling of Stablecoins and the Repositioning of Web3 Looking globally, the main theme of regulation in 2025 is "incorporation." Regulators have deeply realized that the decentralized financial power inherent in crypto technology cannot be completely eliminated. Therefore, the most effective governance strategy is to dismantle and absorb its logic, ultimately integrating it into the existing global financial landscape. This incorporation does not negate the value of Crypto; on the contrary, it means that regulators have implicitly accepted the premise that crypto technology itself is efficient, irreversible, and worth preserving, but only if it is incorporated into an understandable, auditable, and accountable institutional structure. For this reason, this round of regulatory shift has brought about an unprecedented dual effect. On the one hand, there's the rapid return of liquidity and credit; after all, compliance has indeed emboldened massive amounts of capital to enter the market and made institutions willing to allocate funds. On the other hand, it represents a profound examination of the original spirit of Web3: when rules become a prerequisite, how much decentralization remains? In this paradigm shift, stablecoins have become the first and most typical point of pressure. The reason is not complicated. As the infrastructure most deeply intertwined and widely pervasive in Crypto and TradFi, stablecoins naturally occupy the center of regulators' view. They connect to fiat currency, influence payments, participate in clearing, and are deeply embedded in DeFi and on-chain liquidity systems. Therefore, this year, stablecoins have clearly taken the lead in entering an epic period of reshuffling. In July, US President Trump officially signed the GENIUS Act, marking the final implementation of stablecoin legislation. In August, Hong Kong's Stablecoin Ordinance also came into effect, becoming the world's first regional regulatory framework. Meanwhile, major economies such as Japan and South Korea are accelerating their regulatory follow-up, intending to allow compliant entities to issue stablecoins. In other words, the stablecoin sector has entered a true "regulatory window"—gradually evolving from a gray-area liquidity tool into a financial infrastructure where compliance and experimentation coexist. During this process, the sector will inevitably differentiate. On one end are institutional stablecoins included in the whitelist system, undertaking payment and clearing functions; on the other end are crypto-native stablecoins that continue to serve on-chain native finance, emphasizing censorship resistance and self-custody. They will not simply compete to the death, but will serve completely different scenarios and user groups. The real change lies in the fact that stablecoins are being asked, for the first time, a crucial question: what part of the financial system do you want to be? This is also a question that other Crypto/Web3 sectors must answer in 2026. In conclusion, 2025 will undoubtedly be a year of clear turning points. Regulation is no longer vague, confrontational, or passive; it is beginning to systematically shape the structure, boundaries, and development path of the crypto industry. From the US to the EU, from Hong Kong to Japan, regulations are incorporating Crypto at an unprecedented pace. However, we also need to be clearly aware that compliance is merely a means, not the end result of Web3. In this global process of consolidation and restructuring, discerning which elements are merely noise to be swept away by time and which are the true cornerstones of the future will become an essential lesson for every Web3 participant. Regulation is no longer the "enemy" of the crypto industry, but rather its stepping stone to a multi-trillion-dollar market.
Weiliang
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