Regulation paves way for big changes in crypto

The digital asset landscape is undergoing a profound transformation, partly due to regulatory shifts that are lowering some of the barriers that previously deterred regulated financial institutions from entering the market. After years of being dominated by retail investors and early adopters, institutional interest in crypto assets is now emerging and has the potential to shape how the ecosystem matures, as well as how its credibility evolves. 

For a long time, crypto operated in a grey zone, with policies that were either vague or focused mainly on enforcement. Such uncertainty made it difficult for banks, asset managers, and other traditional financial institutions to participate. Now, instead of pushing crypto to the sidelines, policymakers are looking for ways to safely integrate it into the broader financial system.

The United States has been a prime mover on this front. The Securities and Exchange Commission (SEC), which was initially aggressive in classifying most crypto assets as securities, softened its stance after losing pivotal cases in 2023 and early 2024. Since then, two important pieces of legislation have laid out clearer definitions of what constitutes a security rather than a commodity, which makes regulation more straightforward. Bitcoin and Ethereum, for instance, are likely to remain under the oversight of the Commodity Futures Trading Commission (CFTC) since they meet key criteria for decentralisation – such as the absence of a single issuer or affiliated party controlling more than a fifth of the asset or its governance. Conversely, tokens that are built on less decentralised infrastructures will be assessed case by case but are likely to be treated as securities and fall under the SEC’s jurisdiction. 

You can now read the full whitepaper at the link below