The white paper that gave rise to Bitcoin presented cryptocurrencies as an alternative form of money that would allow people around the world to operate outside traditional financial systems. However, the nature of these instruments, their dynamics, and their long-term impact have remained uncertain: some still consider them currencies – or even potential reserve currencies – while others see them as a form of financial investment, and critics go so far as to liken them to gambling. Since 2008, the crypto sector has expanded significantly, attracting more users and increasing financial resources.
For nearly a decade, governments remained largely passive in the face of the growing crypto sphere. However, as cryptocurrencies continue to attract more funding, policymakers – particularly those in high-income countries – have begun to recognise the need to act. Regulating the sector has become especially urgent, given the growing number of critical problems it poses, including the facilitation of illegal activities, lack of transparency, risks to monetary sovereignty, and environmental costs. In the last decade, the wealthiest nations have begun working on specific regulations for the crypto sector, while simultaneously exploring the development of Central Bank Digital Currencies (CBDCs). However, in today’s interconnected world – where funds can easily move across borders – a multilateral approach is needed.
The most advanced economies have become increasingly aware of the threats associated with cryptocurrencies.
This report focuses on the reform efforts undertaken by three key institutions that regulate cryptocurrencies: the Basel Committee on Banking Supervision (BCBS), the Financial Stability Board (FSB), and the Financial Action Task Force (FATF). We find that, after nearly a decade of inaction, the most advanced economies have become increasingly aware of the threats associated with cryptocurrencies. Following the publication of studies and a series of consultations with external parties, the FATF, the FSB, and the BCBS have defined normative frameworks that, although still lacking in some areas like environmental protection, would help address the risks associated with cryptocurrencies if properly implemented.
However, the second Trump administration’s new crypto-friendly stance makes it unlikely that rules such as the BCBS standards will be introduced into US law, weakening multilateral cooperation and the effectiveness of global norms. As cryptocurrencies gain influence in the financial system, strong cooperation will be more necessary than ever. To limit risks, the EU should strengthen the FATF, FSB, and BCBS, deepen engagement with partners committed to multilateralism, and maintain dialogue with the US through available transatlantic forums, even if opportunities for convergence remain limited.
Key Findings:
- Cryptocurrencies pose serious risks to financial stability, monetary sovereignty, transparency, and the environment, making regulation urgent.
- The FATF, FSB, and BCBS have developed soft-law frameworks that can mitigate risks – if properly implemented.
- US disengagement under the Trump administration undermines the effectiveness and credibility of multilateral standards.
- The EU has maintained a risk-averse, multilateral approach, aligning internal regulation with global norms while advancing projects like the Digital Euro.
- Stronger multilateral cooperation and EU leadership will be critical as cryptocurrencies gain greater influence in the global financial system.
Citation Recommendation: Bursi, Matteo and Ettore Greco. 2025. “The Shifting Sands of Cryptocurrency Regulation: A Path Towards Global Cooperation.” ENSURED Research Report, no. 14 (September): 1-33. https://www.ensuredeurope.eu.
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