Global Regulatory Developments - April 2025

April 2025 marked a period of significant regulatory progress and policy direction across key financial hubs, with a strong focus on digital assets, emerging technologies such as AI, and efforts to enhance financial stability and prevent crime.

In Europe, the implementation of the Markets in Crypto-Assets (MiCA) Regulation progressed steadily. The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) released important final reports on preventing market abuse, establishing central contact points for Crypto Asset Service Providers (CASPS), and providing reporting templates. This delivered much-needed clarity for firms operating in the crypto-asset sector. 

National regulators, such as the Commission de Surveillance du Secteur Financier (CSSF), issued detailed guidelines regarding the suitability of management and shareholders in Asset-Backed Token (ART) issuers and CASPs, emphasising a stronger focus on governance. Discussions also aimed at enhancing the European Distributed Ledger Technology (DLT) Pilot Regime signalled a push for greater experimentation and competitiveness in blockchain-based market infrastructure. 

Additionally, ESMA contributed to the ongoing dialogue on the role of artificial intelligence (AI) in finance, emphasising critical considerations for its use in investment strategies. Meanwhile, the European Central Bank (ECB) advanced its work on the digital euro by publishing insights into consumer attitudes and outlining progress on the scheme's rulebook and offline functionality. The EBA’s report on payment fraud illustrated the persistent challenges in securing digital transactions.

The United Kingdom moved closer to establishing its comprehensive crypto asset regulatory regime, with HM Treasury publishing a near-final order outlining new regulated activities. This was complemented by ongoing work from the FCA on its annual programme, emphasising consumer protection and market integrity in the digital sphere. The Bank of England continued its exploration of a digital pound through experiment reports and project updates, assessing AI's implications for financial stability and updating guidance on financial crime prevention.

Australia articulated its vision for an innovative digital asset industry, signalling upcoming regulatory proposals for Digital Asset Platforms and payment stablecoins to foster growth while managing risks.

Internationally, bodies like the BIS and IMF continued to analyse and report on critical themes such as the backing of stablecoins, the potential and challenges of tokenisation, the financial stability implications of Decentralised Finance (DeFi), and the complexities of the AI supply chain within the financial sector. These reports, along with industry insights, underscore a global effort to understand and regulate digital finance's rapid evolution appropriately.

The collective impact of these developments signals an increasingly regulated landscape for digital assets and financial technology. Firms face enhanced compliance requirements related to market conduct, AML/CFT, governance, and operational resilience. The clear trend is towards integrating these new activities and technologies within existing or adapted regulatory frameworks to ensure financial stability, protect consumers and investors, and combat illicit activities. Staying current with these evolving requirements is crucial for firms operating in or seeking to enter these global markets.

Europe

The European Union made significant progress in implementing the Markets in Crypto-Assets Regulation (Mica) and continued to focus on digital finance and AI.

• MiCA:

  • ESMA Final Report on Market Abuse: The European Securities and Markets Authority (ESMA) published its final report on guidelines to prevent and detect market abuse under Mica. This report outlines the arrangements, systems, and procedures that crypto-asset service providers (CASPS) and other relevant entities must implement to maintain market integrity. It also includes templates for reporting suspicious transactions and orders.

  • EBA Final Report on Central Contact Points: The European Banking Authority (EBA) issued its final report on extending the Regulatory Technical Standards (RTS) on central contact points under the Fourth Money Laundering Directive (MLD4) to cover CASPS. This aims to enhance anti-money laundering and counter-terrorist financing (AML/CFT) supervision for firms operating under Mica by ensuring competent authorities have a clear point of contact.

  • Official Translations of EBA Reporting Templates: The official translations of the EBA guidelines on reporting templates under Mica were made available. This is a crucial step for firms across the EU to understand and comply with their reporting obligations regarding their crypto-asset activities.

  • CSSF Guidelines on Suitability Assessments: The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg issued guidelines on assessing the suitability of management members and shareholders in issuers of asset-referenced tokens (ARTS) and CASPS. These guidelines outline the criteria and processes national competent authorities will use to evaluate the fitness and propriety of individuals in key positions within these entities, emphasising robust governance and risk management.

• Digital Markets:

  • Proposal for a More Competitive European Pilot Regime: A proposal emerged from French and Italian authorities (AMF and Consob) titled "TOWARDS A MORE COMPETITIVE EUROPEAN PILOT REGIME: A PROPOSAL FOR FOSTERING EXPERIMENTATION BY BLOCKCHAIN-BASED MARKET INFRASTRUCTURES." This proposal suggests improvements to the existing DLT Pilot Regime to make it more attractive for financial market infrastructures to experiment with blockchain technology to enhance competitiveness and innovation in the European market.

• AI:

  • ESMA on Using AI for Investing: ESMA published materials related to the use of Artificial Intelligence for investing, including a document titled "Using Artificial Intelligence for Investing: What you should consider" and a broader report on "ARTIFICIAL INTELLIGENCE FOR INVESTING." These publications highlight AI's potential benefits and risks in investment decisions, providing guidance for firms and investors on navigating this evolving landscape. They emphasise the need for appropriate governance, risk management, and disclosure.

• CBDC:

  • ECB Updates on Digital Euro: The European Central Bank (ECB) provided several updates on the digital euro project. This included reports on "Consumer attitudes towards a central bank digital currency," outlining public perception and expectations, and "Digital euro: The future of money," discussing the strategic rationale and design considerations. Updates were also provided on "The offline digital euro and holding limits: a user-centred approach," detailing ongoing work on privacy and usability features, and an "Update on the work of the digital euro scheme’s Rulebook Development Group," indicating progress in defining the operational rules for a digital euro ecosystem.

• FinCrime:

  • EBA 2024 Report on Payment Fraud: The EBA released its 2024 report on payment fraud, offering an overview of the latest trends, data, and challenges related to payment fraud across the European Union. The report likely highlights the increasing sophistication of fraudulent activities and the need for continued vigilance and enhanced security measures by payment service providers.

United Kingdom

The UK continued to develop its regulatory framework for cryptoassets and explore the implications of new technologies.

• Digital Markets:

  • HM Treasury Publishes Draft Cryptoasset Order: The HM Treasury has published a near-final order creating new regulated crypto asset activities. This significant step outlines the proposed scope of the UK's future regulatory regime for crypto assets, bringing activities such as operating a trading venue, arranging deals, and custody within the regulatory perimeter. Accompanying policy notes provided further context on the government's approach.

  • Future Financial Services Regulatory Regime for Cryptoassets: Following the draft order, further details emerged regarding the "Future financial services regulatory regime for cryptoassets (regulated activities)," clarifying the types of activities that will require authorisation from the Financial Conduct Authority (FCA) and the expectations placed upon firms operating in this space.

  • A study titled "Distributed Ledger Technology in the Financial Sector: Opportunities and Challenges" was released. It likely examines the potential benefits and risks of DLT adoption in the UK financial system and will inform future policy approaches.

• Regulatory Initiatives Grid: The UK authorities updated their Regulatory Initiatives Grid, providing a high-level overview of upcoming regulatory work across various sectors, including digital markets and payments. This helps firms plan for future regulatory changes.

• FCA Annual Work Programme 2025/26: The FCA released its Annual Work Programme for 2025/26, outlining its strategic priorities and key activities for the upcoming year. This programme likely includes continued focus on consumer protection in the digital asset space and market integrity. A summary of strategic priorities, key activities, and anticipated firm and consumer implications was also provided.

• Payments:

  • BoE Design Note on Intermediary Roles and Scheme Rulebook: The Bank of England (BoE) published a "Design note – Intermediary roles and scheme rulebook," likely detailing proposed structures and rules for intermediaries in future payment systems, potentially including those that leverage new technologies.

• CBDC:

  • Boe/BIS Project Pyxtrial: An update was provided on "Project Pyxtrial," a joint effort between the Boe and the Bank for International Settlements (BIS) that explores the technical feasibility of a retail central bank digital currency (CBDC).

  • BoE Digital Pound Experiment Report: The BoE released a "Digital pound experiment report: Offline payments," detailing the findings of experiments exploring the feasibility and user experience of making offline payments with a potential digital pound.

• AI:

  • BoE on AI in the Financial System: The BoE's "Financial Stability in Focus: Artificial intelligence in the financial system" report highlighted the potential implications of AI for financial stability, including considerations around concentration risk, explainability, and interconnectedness.

• FinCrime:

  • FCA Financial Crime Guide Update: The FCA updated its "Financial Crime Guide: A firm’s guide to countering financial crime risks (FCG)." This update likely includes enhanced guidance for firms on identifying, assessing, and mitigating financial crime risks, with a potential increased focus on risks associated with crypto assets and digital payments.

Australia

Australia continued its path towards establishing a more transparent regulatory framework for digital assets.

• Digital Markets:

  • A statement on developing an Innovative Australian digital asset industry was released. It outlines the government's vision and approach to fostering innovation while ensuring appropriate consumer protection and financial stability in the digital asset sector. This likely includes proposals for licensing and regulating Digital Asset Platforms and stablecoins.

United States

Regulatory discussions and actions regarding digital assets continued in the United States.

• Digital Markets:

  • Offerings and Registrations of Securities in the Crypto Asset Markets: Although specific April 2025 reports were not detailed, ongoing discussions and potential statements from regulatory bodies, such as the SEC, regarding classifying crypto assets as securities and their implications for offerings and registrations remained a key focus.

Dubai

While a specific "DUBAI BLOCKCHAIN POLICY" update for April 2025 was not found in the search results, Dubai has been actively developing its regulatory environment for virtual assets under the Virtual Assets Regulatory Authority (VARA). Ongoing regulatory developments in this jurisdiction focus on refining the licensing regime, market conduct rules, and consumer protection measures for virtual asset service providers.

International

Various international bodies and reports provided insights into global trends and regulatory considerations.

• Digital Markets:

  • BIS—Monitoring the backing of Stablecoins: The BIS continued its work on monitoring the backing of stablecoins, which is crucial for ensuring their stability and mitigating potential risks to financial stability.

• Tokenisation:

  • IMF - Tokenisation and Financial Market Inefficiencies: Although a specific report with this exact title was not confirmed, the IMF's work, including its Global Financial Stability Reports, has addressed the potential of tokenisation to improve efficiency in financial markets while also highlighting potential risks and challenges that need to be addressed by regulators.

  • Congressional Research Service: The Congressional Research Service likely produced reports examining tokenised assets for policymakers, outlining their potential uses, benefits, and regulatory considerations in the US context.

  • Pwc - Tokenisation Standards: Pwc's work on "Tokenisation Standards: The Missing Link for Institutional Adoption" highlights the importance of developing clear standards to facilitate financial institutions' broader adoption of tokenisation.

  • Ripple and BCG Report: The Ripple and Boston Consulting Group (BCG) report, which argues that digital tokenisation will revolutionise the economic system, underscores the growing industry focus on this technology's potential.

  • BIS—Leveraging tokenisation for payments and financial transactions: The BIS continued to explore how tokenisation can improve the efficiency and functionality of payments and financial transactions.

  • HSBC - Asset tokenisation in the Quantum Age: HSBC's perspective on "Asset tokenisation in the Quantum Age" highlights considerations around long-term security and technological advancements that impact tokenisation.

  • BIS - Project Promissa Tokenisation of Promissory Notes: The BIS Project Promissa's final report on tokenising promissory notes demonstrates a practical exploration of tokenisation in specific financial instruments.

• Defi:

  • BIS Papers No. 156, "Cryptocurrencies and Decentralised Finance: Functions and Financial Stability Implications," provides an in-depth analysis of the potential benefits and risks posed by DeFi to financial stability and suggests potential regulatory approaches.

• AI:

  • BIS Papers No. 154, "The AI supply chain," likely examines the financial sector's increasing reliance on a complex AI supply chain and the associated operational and concentration risks.

  • Hong Kong Institute for Monetary and Financial Research (HKIMR): HKIMR's work on "Financial Services in the Era of Generative AI: Facilitating Responsible Adoption" focuses on the responsible integration of generative AI in the financial sector, including considerations of ethics, governance, and risk management.

• FinCrime:

  • Assessment of ML/TF Risks of CASPs: An evaluation of the money laundering and terrorist financing (ML/TF) risks of Crypto Asset Service Providers underscores the ongoing global effort to combat financial crime in the digital asset space, likely informing recommendations for enhanced regulatory and supervisory measures.

  • Nasdaq Verafin Financial Crime Insights: Europe: This report provides specific insights into financial crime trends and challenges within Europe, potentially including those related to digital assets and payments.

• Other digital markets reports, such as the "21 Shares Report – State of Crypto" and Deloitte's "2025 – the year of payment stablecoins," as well as discussions around crypto derivatives becoming a primary digital asset class, reflect market trends and industry perspectives that inform regulatory considerations globally.

• CBDC:

  • Citi - Digital Dollars: Reports and discussions from institutions like Citi regarding "Digital Dollars" indicate ongoing private sector interest and exploration of potential retail or wholesale digital currencies that can interact with and inform central bank digital currency initiatives.

Firm Implications

The regulatory developments in April 2025 present several key implications for firms operating in the financial services and digital asset sectors:

• Increased Compliance Burden: Firms, particularly those dealing with crypto assets, face a growing need to comply with detailed regulations covering areas such as market abuse prevention, AML/CFT, governance, and suitability assessments for key personnel.

• Need for Enhanced Systems and Controls: Meeting regulatory requirements for market integrity, preventing financial crime, and ensuring operational resilience requires investment in robust systems and controls, including those for monitoring transactions, identifying suspicious activity, and managing risks associated with AI adoption.

• Adaptation to New Regulatory Perimeters: In jurisdictions like the UK, expanding regulated activities to include specific crypto asset services means firms previously operating outside traditional financial regulation may now need to seek authorisation and adhere to prudential and conduct requirements.

• Focus on Governance and Suitability: Regulators strongly emphasise the suitability of individuals in management and ownership positions within digital asset firms, requiring rigorous assessment processes.

• Preparation for CBDC Developments: While the introduction of CBDCS is still in various stages, firms involved in payments and financial services should monitor developments and consider the potential impact on their business models and infrastructure.

• Navigating AI Risks and Opportunities: Firms using or planning to use AI for investing or other financial applications must understand and manage the associated risks, including those related to economic stability, while also exploring the potential benefits.

• Importance of Tokenisation Standards: The focus on tokenisation highlights the need for firms to understand and potentially contribute to developing clear standards to facilitate interoperability and institutional adoption.

• Continued Vigilance on Financial Crime: The evolving landscape of financial crime, particularly in digital assets and payments, requires firms to update and strengthen their AML/CFT measures continually.

Overall, April 2025 demonstrated a clear global trend towards bringing digital assets and related technologies within the regulatory perimeter, strongly emphasising market integrity, financial stability, consumer protection, and combating economic crime. Firms must remain agile and proactive in understanding and responding to these evolving regulatory expectations.