Global Regulators Recalibrate Crypto Frameworks to Balance Innovation and Stability

Global regulators are recalibrating crypto frameworks as banks and policymakers seek to balance innovation with risk management, with recent developments in Hong Kong, Switzerland, Brazil, and the European Union underscoring the sector's evolving regulatory landscape. Hong Kong's Securities and Futures Commission (SFC) recently introduced rules allowing local crypto exchanges to access global liquidity pools, a move aimed at positioning the city as a regional digital asset hub, according to new SFC rules. However, the initiative has yet to spark significant market activity, with Chainalysis data showing Hong Kong lags behind peers like India and Japan in crypto adoption. The SFC's approach emphasizes collaboration with overseas affiliates for market surveillance and mandates explicit client consent for cross-jurisdictional trading.

Meanwhile, Switzerland's AMINA, a crypto bank, secured a MiCA license in Austria. The MiCA (Markets in Crypto-Assets) regulation, set to harmonize standards across the bloc, has faced scrutiny from regulators like Austria's Financial Market Authority (FMA), which called for stricter oversight in September. AMINA's compliance with MiCA highlights the growing maturity of crypto markets, though challenges remain as the industry adapts to evolving technological advancements.

In Brazil, a proposed 30% tax on undeclared crypto assets has ignited political debate. Bill 458/21, approved by the National Congress, would allow investors to regularize hidden holdings by paying a 30% levy—half as tax and half as a fine—over 24 months. The measure aligns with Brazil's surging crypto market, which saw $1.7 trillion in transactions between mid-2024 and mid-2025. Critics argue the tax could disproportionately burden small investors, while proponents frame it as a necessary step to formalize the sector and boost government revenue.

Globally, regulators are also rethinking capital requirements for crypto banking. The Basel Committee on Banking Supervision is reviewing its 2022 rules, which imposed a 1,250% risk weight on unbacked crypto assets like Bitcoin. The U.S. and others have pushed for revisions, arguing the original standards are outdated amid the rise of stablecoins. The overhaul aims to address liquidity risks and systemic vulnerabilities while encouraging banks to engage with digital assets.

Enforcement efforts persist as well, with Australian police arresting 55 individuals in a crypto-linked criminal operation, seizing $37.9 million in digital assets. Europol has warned that crypto crime is becoming increasingly sophisticated, urging global agencies to enhance collaboration.

The push for balanced regulation is evident across jurisdictions, with Hong Kong's liquidity rules, Brazil's tax reforms, and the EU's MiCA framework reflecting a shared goal: fostering innovation without compromising financial stability.