Regulatory Shifts and Market Dynamics Shape the Future of Crypto Exchange Development in 2026

Regulatory developments in the U.S., UK, and Hong Kong are reshaping the landscape for crypto exchanges in 2026. The U.S. has implemented new tax reporting requirements, while the UK and EU have launched standardized data collection under the Crypto-Asset Reporting Framework (CARF). Hong Kong is advancing its stablecoin regulations as part of broader financial reforms.

These changes are prompting centralized exchanges to adjust compliance strategies and user onboarding processes. For example, U.S. service providers now report cost basis to the IRS, but decentralized platforms remain exempt. In the UK, firms must reapply for authorization under the new Financial Services and Markets Act, with a licensing gateway expected to open in September 2026.

Security concerns are also rising. A dark web listing recently claimed to expose Kraken user data, highlighting vulnerabilities in internal systems and customer dashboards. This has increased scrutiny on data protection protocols and encryption standards within the industry.

How Are Regulatory Changes Affecting Centralized Exchanges?

New tax rules in the U.S. are altering how exchanges calculate and report gains for users. With tax rates ranging from 0% to 37%, depending on the holding period, firms are updating compliance tools and reporting workflows to meet IRS requirements.

The UK's FCA is enforcing similar mandates. Under the new regulatory regime, crypto firms will need to collect expanded customer data and submit annual reports to tax authorities. This will align the industry with traditional financial standards but increase compliance costs.

Hong Kong's regulatory framework for stablecoins is expected to finalize in 2026. The special administrative region is moving forward independently from mainland China, where crypto regulations remain inconsistent and often restrictive.

Why Is the Industry Shifting Toward Infrastructure?

Crypto exchanges are diversifying revenue streams beyond volatile trading activity. Companies like Coinbase are now emphasizing infrastructure services such as custody, staking, and compliance tools. These businesses are less cyclical and provide steady income regardless of price swings.

Goldman Sachs highlighted this shift as a key reason for upgrading Coinbase to Buy. The firm noted that Coinbase's subscription and services revenue now accounts for about 40% of total revenue, compared to less than 5% five years ago. This transition supports long-term growth and higher valuations.

Other firms are following suit. Japan's finance minister has advocated for integrating crypto trading into stock exchanges, while Goldman Sachs also upgraded Robinhood and other infrastructure-focused firms.

What Are Analysts Watching Next?

The rollout of CARF in the UK and EU will standardize tax reporting across exchanges. This could lead to cross-border data-sharing and impact user privacy expectations. Firms that fail to adapt may struggle to attract international clients.

Goldman Sachs is also monitoring the U.S. regulatory landscape. The bank is cautiously positive on crypto infrastructure and newer growth areas like tokenization and prediction markets. However, it cautions that competition and customer acquisition costs could pressure firms like eToro.

In Hong Kong, the final passage of the stablecoin bill will determine the region's attractiveness for global crypto firms. The country's regulatory clarity contrasts with China's shifting stance and recent crypto bans.

Investors should watch for developments in compliance costs, user data security, and the balance between regulatory oversight and market growth. As exchanges move toward infrastructure and compliance, the industry's long-term viability may depend on how well they adapt to evolving legal and technological challenges.