What 2025 Could Bring for Crypto: Stricter Oversight and Global Shifts

Developments in 2024 – from the shuttering of anonymous Bitcoin ATMs in Spain to new guidelines in the Philippines – offer a preview of more stringent regulatory measures expected to shape the market in the coming year.

Spain’s once-thriving network of anonymous Bitcoin ATMs is closing under newly enforced European Union rules. For transactions exceeding €990, operators must now verify users’ identities.

This abrupt change arrives as part of the EU’s wider push to strengthen anti-money laundering efforts, particularly after years of largely unregulated crypto activity.

“These unregulated transactions are being phased out,” one industry observer noted, citing the EU’s goal to clamp down on money laundering and terrorist financing.

A Bitcoin ATM, Source: BNC

The Markets in Crypto-Assets (MiCA) regulation – introduced in May 2023 and gradually rolled out this year – imposes strict Know Your Customer (KYC) requirements and heightened scrutiny on cryptocurrency transactions. The European Securities and Markets Authority (ESMA) has confirmed that the final wave of MiCA rules will take effect on December 30, 2024, covering market abuse and insider trading.

Despite MiCA’s phased implementation, industry experts warn that both companies and regulators remain unprepared.

“The cryptocurrency industry is not ready for MiCA,” said Delphine Forma, Head of UK and EU Policy at Solidus Labs. “Regulators are not ready… Some countries haven’t even implemented an enforcement law.”

Looking ahead to 2025, ESMA and other European authorities plan further guidance on the classification of crypto-assets, including asset-referenced tokens (ARTs) and electronic money tokens (EMTs).

The goal, according to a December 2024 release by the EU’s three supervisory agencies, is to “facilitate consistency in the regulatory classification of crypto-assets” and reduce the risk of regulatory arbitrage.

Across the globe, the Philippine Securities and Exchange Commission (SEC) is forging its own path with a draft proposal dubbed the “SEC Rules on Crypto-Assets Service Providers.” Unveiled in late 2024, the rules outline registration requirements, minimum capital thresholds, and disclosure obligations for companies offering trading, custody, or other crypto services.

The SEC’s move aims to guard against fraud and market manipulation. Under the draft rules, service providers must also bolster their cybersecurity frameworks, aligning with the country’s National Cybersecurity Plan. Observers say the Philippines’ fast-growing user base is a key reason for tougher oversight.

In the United States, industry officials are anticipating a shift in crypto policy with President-elect Donald Trump’s inauguration next month. Trump, who campaigned on promises to champion cryptocurrencies, is reportedly considering several executive actions that could reshape the sector. Proposals include establishing a government-managed Bitcoin reserve, creating a dedicated crypto council, and ensuring companies gain better access to banking services.

Still, the practical effect of such orders remains uncertain. Independent agencies like the Federal Reserve and other banking regulators are not legally bound to alter their supervisory frameworks on presidential directive alone.

“(They) are not going to change policy on the ground on day one,” said Jonah Krane, a partner at financial firm Klaros Group. “But they will tell you what direction this administration wants to head.”

With 2024’s regulations starting to bite, many anticipate that 2025 could be the year crypto hits a crossroads between rapid innovation and increased government scrutiny. On one side, advanced technologies like artificial intelligence promise greater efficiency and new financial products. On the other, concerns about market manipulation, illicit activity, and insufficient consumer safeguards continue to drive tougher rules worldwide.

The industry’s next challenge will be navigating these changing regulations while maintaining the open, decentralized ethos that initially fueled crypto’s popularity.