The digital asset enforcement landscape has undergone a dramatic transformation in 2025, shifting from an adversarial "regulation by enforcement" model to a collaborative framework. 

The enforcement model "promulgated a rule that applied existing law to new technology in a disproportionately harsh way," according to a report published in the Stanford Journal of Blockchain Law & Policy by Alexandros G. Kazimirov, Transatlantic Technology Law Forum Fellow at Stanford Law School. Inevitably, this was "an ineffective prioritization of its three-part mission: protecting investors over safeguarding fair markets and facilitating capital formation."

The conjunction of regulatory clarity in the U.S., full implementation of Europe's MiCA regulation, and emerging cross-border frameworks is fundamentally reshaping how institutions approach digital asset compliance and investment strategies. Here, we’ll explore what the new regulatory landscape means for digital assets leaders at financial institutions.

The Great Enforcement Pivot: From Prosecution to Partnership

The current state of the market is the result of multiple regulatory changes, none of which occurred in a vacuum.

The End of "Regulation by Enforcement"

The most dramatic change occurred on April 7, 2025, when Deputy Attorney General Todd Blanche issued a memorandum announcing that the Department of Justice is not a "digital assets regulator" and will no longer pursue litigation that "superimposes regulatory frameworks on digital assets." This policy reversal marked the official end of the Biden administration's enforcement-heavy approach.

The DOJ's new directive focuses exclusively on prosecuting conduct that victimizes investors or uses digital assets for crimes such as terrorism, narcotics trafficking, and human trafficking.

Paul Atkins Becomes SEC Chairman

Paul Atkins was sworn in as SEC Chairman on April 21, 2025, replacing Gary Gensler. This also signaled a fundamental shift in agency priorities. 

Under Gensler's leadership, the SEC had "relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way," The SEC said in a January 2025 press release. The agency's new approach emphasizes collaborative engagement over punitive enforcement actions.

Formation of New Crypto Task Force

On January 21, 2025, Acting Chairman Mark Uyeda launched the SEC's Crypto Task Force, led by Commissioner Hester Peirce. According to the January press release, the Task Force aims to "draw clear regulatory lines, appropriately distinguish securities from non-securities, craft tailored disclosure frameworks, provide realistic paths to registration for both crypto assets and market intermediaries." 

This marks a 180-degree turn from the previous administration's approach of using enforcement actions to create regulatory precedents.

Global Regulatory Harmonization: The MiCA Effect

Part of the shift in U.S. regulation is a reaction to changes globally. Regulators in developed countries are taking steps to create clearer guidelines for crypto and digital asset markets, so they can be leveraged by institutions with less risk.

Europe Sets the Standard

The Markets in Crypto-Assets (MiCA) regulation achieved full implementation on December 30, 2024, establishing the world's first comprehensive regulatory framework for digital assets. MiCA creates a single regulatory regime across all 27 EU member states, allowing Crypto Asset Service Providers (CASPs) to operate with a single license across the entire European Union. 

The regulation addresses three key areas: market integrity, anti-money laundering compliance, and operational resilience.

MiCA's implementation has created significant competitive advantages for European markets. The regulation requires full reserve backing for stablecoins, governance standards for crypto asset service providers, and comprehensive disclosure requirements for all digital asset offerings. 

This clarity has attracted significant institutional investment that previously avoided the space due to regulatory uncertainty.

Transatlantic Regulatory Convergence

The success of MiCA has prompted increased coordination between European and U.S. regulators. Recent discussions at the joint EU-U.S. Financial Regulatory Forum have focused on creating compatible frameworks that prevent regulatory arbitrage while maintaining market integrity. 

According to a press release from the Department of the Treasury, the Forum focused on seven themes:

• Market developments and financial stability
• Digital finance and payments
• Sustainability-related financial items
• The EU Savings and Investments Union
• Banking and insurance
• Anti-money laundering and countering the financing of terrorism

Cross-border payment frameworks are emerging that leverage blockchain interoperability standards, including ISO 20022 adoption and alignment with the New European Interoperability Framework.

The U.S. Regulatory Revolution: From Uncertainty to Clarity

President Trump's January 23, 2025 executive order "Strengthening American Leadership in Digital Financial Technology" fundamentally reversed the previous administration's crypto policies. The order explicitly prohibits the creation of a U.S. central bank digital currency while supporting USD-backed stablecoins. 

David Sacks leads the President's Working Group on Digital Asset Markets, tasked with developing a comprehensive federal regulatory framework within 180 days.

The executive order protects fundamental blockchain activities, including self-custody, mining, and permissionless transactions. Federal agencies must now review existing digital asset regulations and submit recommendations for changes that support innovation while maintaining investor protection.

Speakers at DigiAssets 2024 Predict Stablecoin Legislation Breakthroughs

DigiAssets events are an excellent place to gain the latest insights about the digital asset and cryptocurrency markets, as well as to stay ahead of upcoming legislation. Many of the predictions made at DigiAssets 2024 proved to be accurate.

Expecting Stablecoin Legislation

During the expert panel called "Mapping Uncharted Waters: Navigating the Global Regulatory Framework for Digital Asset Investment" at DigiAssets 2024, Ryan Louvar, Chief Legal Officer and Head of Business and Legal Affairs, WisdomTree, made the following prediction:

"I think stablecoin legislation will be the first piece of federal legislation that will move beyond the bills we’ve seen pass through Congress over the last several years. In early 2025, that will be one of the first pieces of legislation that gains bipartisan support."

Preparing for a Standardized Payment Structure

The discussion during a DigiAssets 2024 fireside chat about digital asset enforcement by the SEC produced similar insights. For example, David Hirsch, Partner at McGuireWoods and Former Chief of the Crypto Asset and Cyber Unit in the Division of Enforcement, Use Securities and Exchange Commission, said the following:

"Having effective, prudential, and reliable regulation over stablecoins would be very helpful. Right now, the regulation seems to focus mostly on money transmitter licenses, and that’s not a great fit. I think a payment structure will make people more accepting of crypto, and as more people use crypto daily, they’ll demand additional regulatory guidance."

These were accurate predictions of what was to come: the GENIUS Act.

The GENIUS Act

The Senate's passage of the GENIUS Act on June 17, 2025, with a bipartisan 68-30 vote, represents the first comprehensive federal stablecoin legislation. The bill establishes a Permitted Payment Stablecoin Issuer (PPSI) regime that requires full reserve backing with U.S. dollars or Treasury bills. 

Monthly audits and anti-money laundering compliance become mandatory for all issuers.

The legislation creates a dual federal-state regulatory structure, with issuers of stablecoins exceeding $10 billion in market capitalization subject to federal oversight. Banks, credit unions, and qualified non-bank financial institutions can issue stablecoins under the new framework. 

The GENIUS Act explicitly states that payment stablecoins are neither securities nor commodities, providing crucial legal clarity.

SEC's New Collaborative Approach

Chairman Paul Atkins has initiated a series of public roundtables called "Spring Sprint Toward Crypto Clarity" to gather industry input on regulatory frameworks. The SEC's Crypto Task Force is conducting ongoing roundtables on topics including crypto trading, custody considerations, tokenization, and decentralized finance. 

This represents a dramatic shift from the enforcement-first approach of the previous administration.

Market Infrastructure Development

During the "Mapping Uncharted Waters" panel at DigiAssets 2024, Dr. Lisa Cameron, Former MP and Chair of Crypto and Digital Assets All Party Parliamentary Group, UK Parliament, explained how regulating cryptocurrencies and other digital assets was barely a priority for the UK government just a few years ago:

"In 2022, there had been no debates in the House of Commons on cryptocurrency, so education was severely lacking," she said. "When I spoke to people about it, they would say, ‘The UK is not doing this,’ and then I would have to go back to members of Parliament, members of the House of Lords and say, ‘Actually, about 5 million people are doing it.’"

Then, in 2024, the Bank of England and the Financial Conduct Authority (FCA) announced the launch of the Digital Securities Sandbox (DSS).

Trading and Settlement Evolution

The UK Digital Securities Sandbox has worked alongside other working groups to develop and streamline new standards for digital asset exchanges. For example, its work with the European Securities and Markets Authority’s (ESMA) DLT Pilot Regime has accelerated the development of tokenized market infrastructure.

These types of collaborations have yielded benefits like the following:

• Different blockchain networks can now work together, allowing digital assets to move seamlessly between platforms
• Transactions settle faster and with more certainty, reducing the risk of failed or delayed payments
• Cross-border payments happen in real-time with instant validation, cutting down on errors and waiting periods
• Smart contracts automatically execute agreements when conditions are met, eliminating the need for manual processing
• Universal standards like ISO 20022 ensure all blockchain systems can communicate and work together effectively

Investors can expect more collaborations in the future as countries standardize their digital asset regulations and search for pathways to greater interoperability.

Future Implications and Strategic Outlook of Digital Asset Enforcement

Global rules are becoming more standardized as countries attempt to mimic successful approaches like Europe's MiCA regulation. More governments are creating their own "regulatory sandboxes" where companies can test new digital asset technologies safely before full deployment.

The U.S. stands apart on digital currencies. While most major economies are developing their own central bank digital currencies, America has banned them entirely.

This difference could hurt the U.S. dollar's role in future digital payments and put America at a competitive disadvantage.

Institutional Adoption Catalysts

Clear rules drive institutional investment. When financial institutions know exactly what regulations they must follow, they feel confident investing large amounts in digital assets. New products that turn real-world assets like real estate into digital tokens create fresh investment opportunities.

Professional infrastructure now exists. Digital asset custody, trading, and insurance now meet the same standards as traditional finance.

This gives institutions security and oversight to participate confidently in crypto markets.

Conclusion: The New Regulatory Paradigm for Digital Assets

2025 marked a turning point from regulatory hostility to cooperation. The SEC's shift from aggressive enforcement to collaboration, plus Europe's completed MiCA framework and new U.S. stablecoin laws, created the best environment ever for institutional crypto adoption.

To succeed, institutional investors should actively work with regulators, build strong compliance systems, and position themselves for the next wave of digital asset growth.

As one practitioner told Digital Assets Insights: "This is a global issue, it's a global sector, and there needs to be some shared best practice and interoperability."

To learn more, don't miss the next Digital Assets US conference. It's happening from October 20-21st, 2025 at the JW Marriott Miami.