January set the tone for crypto regulation in 2025: as the U.S. loosens up, other regions take their own path—Africa pushes anti-fraud measures, Asia balances its approach, and Europe starts to follow the MiCA playbook.
President Donald Trump's second inauguration started an immediate shift in U.S. cryptocurrency regulation, beginning with a series of high-profile exits. Federal Reserve Vice Chair Michael Barr kicked off the departures on January 6, informing then-President Joe Biden that he would step down on February 28 if not replaced sooner. His departure marked the latest exit of officials allegedly linked to "Operation Chokepoint 2.0," a regulatory crackdown that pushed banks away from serving cryptocurrency companies.
As expected, both the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler and the Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam stepped down on inauguration day, January 20. In his departure announcement, Behnam warned of the growing regulatory "gap" in digital asset oversight.
Consumer protection remains in focus despite the move towards a more deregulated market. On January 25, the Consumer Financial Protection Bureau (CFPB) proposed rules requiring crypto firms to reimburse customers for hack-related losses, extending traditional banking security standards to digital wallets. The proposal, open for industry comment until March 31, would bring stablecoins and other fungible digital assets under the Electronic Fund Transfer Act’s umbrella.
The Senate's crypto agenda gained a powerful advocate as Cynthia Lummis, known for authoring major crypto legislation and publicly holding Bitcoin, secured the chair of the Senate Banking Committee's Digital Assets Subcommittee on January 18. Her appointment energized discussions of a national Bitcoin reserve, with her proposal suggesting the use of revalued gold certificates from 1993 prices to fund Bitcoin purchases aimed at addressing the national debt. Three days earlier, Representative Tom Emmer, co-chair of the Congressional Blockchain Caucus and a consistent opponent of Gensler's SEC, took the vice chair position of the House Subcommittee on Digital Assets, FinTech, and AI.
A dozen bills now await congressional consideration, including the Financial Innovation and Technology for the 21st Century Act, the Digital Asset Market Structure and Investor Protection Act, and the Responsible Financial Innovation Act. Two competing stablecoin frameworks—the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act—have gained fresh attention as lawmakers race to catch up with Europe’s Markets in Crypto-Assets (MiCA) framework, which took effect in early January.
On January 21, Acting SEC Chairman Mark Uyeda announced the formation of a new Crypto Task Force and appointed Commissioner Hester Peirce to lead it. Peirce, dubbed "Crypto Mom" for her pro-innovation stance, would head the initiative until Paul Atkins' confirmation as SEC chair. The task force received a mandate to develop comprehensive regulatory guidelines and establish realistic registration pathways for crypto entities, collaborating with the CFTC and other regulators to create sensible disclosure frameworks.
Rebecca Denton
Trump’s executive order, titled "Strengthening American Leadership in Digital Financial Technology," delivered the administration’s most sweeping changes on January 23. The order established a 24-member working group led by venture capitalist and former PayPal executive David Sacks, setting a 180-day deadline for new regulatory proposals. The group, including the Treasury Secretary and heads of the SEC and CFTC, received mandates to draft comprehensive legislation and explore creating a national digital asset stockpile potentially sourced from federally seized cryptocurrencies. The order explicitly banned the creation of U.S. central bank digital currencies (CBDCs), just as Europe prepares to launch its digital euro-pilot and the UK announced a new CBDC lab.
Rebecca Denton
The same day, the SEC rescinded Staff Accounting Bulletin No. 121 (SAB 121), eliminating a requirement that forced banks to record third-party crypto holdings as liabilities. The reversal, championed by Peirce, aimed to reduce custody business overhead that had effectively barred many banks from serving as digital asset custodians.
The crypto custody market increased significantly after Bitcoin Spot ETF was approved in 2024. The actual digital assets behind the traded papers need to be kept somewhere, and until now, Coinbase had a 90% share of this market.
January saw four Republican-led states tackle cryptocurrency regulation:
Rebecca Denton
It seems the new U.S. administration's crypto-friendly stance has pushed African regulators to address years of policy uncertainty. Rising crypto volumes and fraud across the continent have finally compelled policymakers to act.
The Financial Stability Board Regional Consultative Group, policymakers from the Middle East and North Africa, visited Sharm El Sheikh, the Central Bank of Egypt, in late January. Their two-day meeting focused on implementing the Financial Stability Board's crypto framework across the region.
"With the U.S. moving this way, I think you'll see a lot more speed from various governments in Africa in terms of achieving regulatory clarity. This gives us more confidence that over the next year or so, we'll see sweeping regulatory changes across the continent." - Yellow Card CEO Chris Maurice
In Uganda, State Minister for Planning Amos Lugoloobi revealed on January 6 that the government was weighing crypto regulations after reports showed $700 million (UGX 2.5 trillion) in transactions. Any new rules would become part of the National Development Plan IV, connecting crypto policy to broader economic strategy.
Kenya received a report from the IMF on January 8 urging the country to update its crypto laws to better align with international standards and combat misuse. Two days later, Treasury Cabinet Secretary John Mbadi unveiled the government's response: a "National Policy on Virtual Assets and Virtual Asset Service Providers." The draft, which is under public consultation, tackles consumer protection and money laundering concerns while meeting global standards.
The Bank of Namibia broke new ground on January 13 by granting two crypto firms six-month temporary licenses. Mindex Virtual Asset Exchange and Landifa Bitcoin Trade CC will now build their operations under regulatory watch, with permanent licenses depending on how well they meet central bank standards. Despite this, the country clarified that it does not consider crypto a legal tender.
In September 2021, El Salvador became the first nation in the world to adopt Bitcoin as legal tender, requiring all businesses and public institutions to accept it. Now, the Salvadoran Parliament approved an amendment to the Bitcoin Law that eliminates its use as an official currency.
The country agreed to scale back certain Bitcoin-related initiatives as part of a $1.4 billion loan agreement with the International Monetary Fund (IMF). Other pressures could have been put on President Nayib Bukele during his call with the U.S. President.
Rebecca Denton
Despite this El Salvador confirmed the purchase of additional bitcoins announced by The Bitcoin Office in mid-January. Eleven bitcoins (almost the value of the negotiated IMF loan) were added to its Strategic Bitcoin Reserve.
El Salvador has stacked 21 BTC this week!
— The Bitcoin Office (@bitcoinofficesv) February 4, 2025
Total SBR Holdings: 6,068.18 BTC
Total Added Today: +1 BTC
Total Added Past 7 Days: +21 BTC
Total Added Past 30 Days: +60 BTC
The first Strategic Bitcoin Reserve in the world keeps growing and so El… pic.twitter.com/iz2x9CGbuu
While African regulators are focused on basic consumer protections and opening up market access, Asia continues to tackle institutional adoption and cross-border flows. The challenges look different, but the core struggle is the same—finding the right balance between innovation and stability in a crypto space that is moving too fast.
China ordered tighter scrutiny of crypto-related foreign exchange activities on January 6, with the State Administration of Foreign Exchange directing banks to monitor and flag suspicious transactions.
At the same time, China unveiled an ambitious plan to inject 2 trillion yuan ($273 billion) through 2029 into national data infrastructure, starting with pilot programs in 2024.
Rebecca Denton
South Korea's Financial Services Commission (FSC) will soon let institutions trade on local crypto exchanges, FSC Secretary-General Kwon Dae-young announced January 8. The plan, starting with non-profit organizations, breaks from rules that had limited trading to retail investors with real-name accounts. Kwon said the regulator would expand oversight of stablecoins, crypto exchanges, and meme coins under its Virtual Asset User Protection Act.
South Korea's cryptocurrency market is dominated by local exchanges, with Upbit controlling up to 80% and Bithumb, Coinone, and Korbit taking up the rest. This dominance is driven by strict regulations that favor domestic platforms, requiring compliance with real-name accounts, AML laws, and local banking partnerships, which foreign exchanges struggle to obtain.
The market is also heavily driven by retail traders rather than institutional investors, leading to speculative trading and frequent occurrences of the "Kimchi Premium," where crypto prices in South Korea are higher than global averages.
In January, Indonesia moved its crypto oversight from the Commodity Futures Trading Regulatory Agency "Bappebti" to the Financial Services Authority and Bank of Indonesia.
We are certain this step will lead to long-term benefit for the financial sector and the physical crypto trading in Indonesia," - Minister of Trade Budi Santoso stated.
The Indonesian government reported 22 million registered crypto asset customers as of November 2024. Crypto asset transactions in Indonesia more than tripled in 2024 compared to 2023, estimated at more than 600 trillion Indonesian rupees (around $37 billion.)
In other developments in Asia, Singapore tackled fraud in its "Protection from Scams Bill" by extending police powers to freeze suspicious accounts for up to 150 days. Thailand chose a different path, rolling out a system for tourists in Phuket to pay in BTC on January 20 by converting crypto to baht through local exchanges.
In an effort to fight energy shortages and stabilize consumption across regions, Russia has imposed a six-year crypto mining ban, initially drafted at the end of 2024, affecting ten regions, including Dagestan, Chechnya, and the Donetsk and Lugansk People's Republics. Further seasonal restrictions apply to key mining areas such as Irkutsk, Buryatia, and the Trans-Baikal Territory to manage winter energy consumption.
The Central Bank of Russia has also created a mandate that asks foreign trade contracts involving digital rights to register with authorized banks since January 11. This requirement applies to import contracts exceeding 3 million rubles and export contracts exceeding 10 million rubles. Russia plans to integrate DeFi further into its dated TradFi systems.
The Markets in Crypto-Assets regulation (MiCA) launched across the European Union on December 30, creating the first unified crypto rules for all member states. The regulation originally set an 18-month window for companies to obtain licenses. Yet fifteen EU countries chose to move faster, with some requesting compliance in as little as five months. For crypto firms that secure authorization, the reward is substantial, with access to customers across all 27 EU nations without needing country-level approval.
Stablecoins became the first focus for the new framework. The European Securities and Markets Authority (ESMA) demanded platforms remove non-compliant tokens (like Tether's USDT and PayPal's PYUSD) from their offerings by month-end. While exchanges scrambled to meet ESMA's January 31 deadline, investors received a two-month grace period to close positions. Stablecoin issuers must now demonstrate full reserve backing, undergo quarterly audits, and keep clean transaction records.
Under MiCA, different digital assets face varying degrees of regulation—algorithmic stablecoins are banned outright from EU markets, while electronic money tokens must align with traditional banking standards by June.
In the Czech Republic, National Bank Governor Aleš Michl proposed allocating up to 5% of the bank's €140 billion reserves into Bitcoin to diversify assets. The following day, the bank's board approved a study to explore this potential investment. However, European Central Bank President Christine Lagarde dismissed the proposal the next day, arguing that Bitcoin's volatility makes it unsuitable for central bank reserves.
Rebecca Denton
The UK Treasury issued on January 8 a statutory instrument clarifying that crypto-asset staking does not constitute a collective investment scheme under the Financial Services and Markets Act 2000. This amendment, effective January 31, excludes "qualifying crypto-asset staking" from the scope of collective investment schemes, essentially reducing regulatory hurdles for staking service companies.