There was little evidence of a summer wind-down in July’s global developments on digital assets. So much so, it is somehow mid-August already! Below are the digital asset policy developments that caught my attention most since the last roundup.
The Spotlight Remains on the US
We expected a lot from Washington, DC before the summer recess, and we were not disappointed.
Between the federal stablecoin legislation and the passage through the House of a market structure bill (now reintroduced in the Senate as a discussion draft), and the White House’s comprehensive report on crypto innovation, US developments remain front and center of the global spotlight.
Less prominent, but just as meaningful, was a joint statement from the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC) clarifying crypto permissibility for banks.
Mind the Gap
A widening gap is emerging between digital assets markets in the US and Europe, particularly in terms of institutional adoption.
The White House report makes a clear effort to mandate both clarity and permissibility in how banks engage with digital assets. Importantly, it endorses the benefits of Permissionless Blockchains, urging regulators to take a technology-neutral approach focusing on underlying risks of the activity rather than the technology itself. This extends to openly challenging the BCBS crypto standard.
Across the pond, the UK Chancellor’s Mansion House Speech included an ambition for “UK financial services to be at the forefront of digital asset innovation” in her Mansion House Speech. Coordinated with the speech, HM Treasury issued a Wholesale Financial Markets Digital Strategy, which plans to apply technologies to fundamentally reimagine UK wholesale financial markets, in particular by adopting DLT and AI.
However, the Governor of the Bank of England remains skeptical to stablecoins, crudely severing the payments and settlement leg of Britain’s capital markets ambitions.
The S-word.
Sandboxes – the main lever for European capital markets innovation – are merely a sideshow in the US.
Indeed, in the US, the SEC and CFTC are exploring the creation of a joint sandbox regime. However, the steer from the White House is that the focus should be on a clear pathway for entities to graduate from the sandbox.
In contrast, Europe’sDLT Pilot Regime (the EU’s capital markets sandbox) may well be the limit of Europe’s ambitions in integrating blockchain technology into capital markets. We will have more details on this in the fall.
Hong Kong and South Korea
In APAC, I was most interested by developments in Hong Kong and South Korea this past month.
In July, South Korea accelerated digital asset legislation, fast‑tracking reforms around taxation, stablecoins, and investor protections, while also gearing up to unveil formal crypto lending rules by August to curb excessive leverage on platforms like Upbit and Bithumb.
In Hong Kong, stablecoin licensing rules have now taken effect, bringing to light not only who may issue them, but also some of the growing pains involved in making them available to the public.
As consultations wrap up on crypto dealing and custody regulation, it’s clear the two are closely linked. Hundreds of OTC dealers will need to (re)license. How regulators calibrate the burden of their custody obligations, including with the technology choices available on the Hong Kong market, will be critical for ensuring long-term growth and industry confidence.
As we head into the fall, the regulatory momentum shows no sign of cooling. From DC to Seoul, the message is clear: digital asset oversight is maturing fast.
