The central debate in digital asset policy used to be
whether to regulate at all. That question is now settled. MiCA’s transitional
period ended July 1st, 2026; the UK finalized its cryptoasset rulebook on June
30th; the US celebrated the one-year anniversary of the
GENIUS Act becoming law; and the SEC and CFTC issued joint guidance in
mid-March that classified many digital assets as digital commodities.
What now keeps industry participants and policymakers up at
night is whether rules written in Washington, London, and Brussels can
interoperate and work alongside one another.
The end of MiCA’s transitional period triggered a major
shakeout in the European market. Of the more than 1,200 firms previously
operating under national frameworks, only around 244 secured authorization. The
UK’s full regime goes live in October 2027, while in the US, perpetual futures
were brought onshore in May 2026, the GENIUS Act takes effect in January 2027,
and negotiators continue work to finalize and pass the CLARITY Act.
Recently, the Transatlantic Taskforce for Markets of the
Future issued a joint US-UK statement affirming stablecoins as an important
vehicle for innovation in digital money and committed to working together to
develop clear, consistent regulatory pathways forward to enable stablecoins to
flourish between the two jurisdictions.
In a first for digital assets policy, two of the world’s
major financial jurisdictions are developing interoperable and convergent
frameworks designed to enable and promote digital asset-based finance. That
consensus is new, and it matters.
However, agreeing that something belongs inside the perimeter
isn’t the same as building one that works across borders. Take a stablecoin
issued in the UK, held by a customer in the EU, and used to settle a
transaction with a US institution. The transaction may happen almost instantly,
but the rules covering reserves, redemption, custody, reporting, and insolvency
still sit across three separate systems.
The goal shouldn’t be identical rules everywhere. We should
aim to make sure different regimes offer broadly comparable protections and
recognize regulated activity taking place elsewhere.
Why Frameworks Alone Are Not Enough
Having frameworks in place and having frameworks that work
together are different things. The technology hasn’t slowed down while
legislation was being written. DeFi, tokenization, and agentic payments are
moving from experiment to infrastructure.
Each jurisdiction built its framework for its own market,
legal system, and political moment, producing serious rulebooks that are not
designed to talk to each other.
Stablecoins illustrate this most sharply. Issuers face
different rules on what counts as reserves, where those reserves are held, how
quickly customers can redeem, and what happens if the issuer fails. These
differences are manageable for a single-market issuer. They become structural
problems the moment a stablecoin crosses borders.
Making regimes work together doesn’t mean erasing those
differences. It means agreeing that reserves are available, customers can
redeem, assets are protected, and regulators know who’s responsible if
something goes wrong.
The networks moving tokenized assets are global, while the
firms using them remain accountable to national regulators. The challenge is
keeping that accountability without adding friction every time an asset crosses
a border.
What Happens If We Get This Wrong
The consequences fall across three areas, and none are
abstract.
For firms, the cost compounds. Running separate legal,
compliance, and reporting structures suppresses the ability for firms to
quickly scale and pushes businesses toward whichever market is easiest to
navigate, including those markets with no regulatory frameworks in place. For
instance, MiCA’s compliance burden falls disproportionately on smaller firms,
which face many of the same requirements as much larger exchanges.
For the financial system, fragmentation blurs the full
picture. One regulator may oversee the issuer, another the reserves, another
the platform. If regulators aren’t already working together, especially in a
domestic capacity, let alone international interoperability, responding to a
market failure or stress becomes significantly harder – the costs of which can
be immense.
For economies, investment flows toward markets offering both
regulatory clarity and access. The inability to bridge regulatory distinctions
between markets will affect how capital moves and where it moves.
The countries
setting the standards now will shape the rules for the next era of financial
markets, which is why the establishment of the Taskforce and the recent
statement are so critical to building this next era underpinned by democratic
values.
What Needs to Happen
The tools for interoperability already exist. The EU
demonstrated that a single rulebook can work across 27 countries. The US
has created a federal framework for payment stablecoins and begun
clarifying the roles of its main market regulators. The UK built the Digital
Securities Sandbox, the only live supervised testing environment for digital
securities anywhere in the world.
Three things can happen now, without new laws.
First, governments need a clearer process for deciding when
another jurisdiction’s rules offer comparable protections. The GENIUS Act lets
foreign stablecoin issuers operate in the US where the
Treasury Department judges their home rules comparable.
The UK and US
should use the Transatlantic Taskforce to agree on what that comparison covers
as a basis for determinations by the Stablecoin Certification Review Committee,
including on the topics of reserves, redemption, safeguarding, reporting, and financial
crime controls, and bring other major markets into the discussion.
Second, regulators need practical arrangements for
supervising cross-border activity. Common definitions help, but aren’t enough.
Authorities need clear channels for sharing information, coordinating
enforcement, and deciding who leads if an issuer fails.
Just released – ABA and 52 state banking associations urge @USTreasury to uphold GENIUS Act’s ban on stablecoin interest: https://t.co/2P2jelAuAg
— American Bankers Association (@ABABankers) November 4, 2025
The March 2026 joint
SEC-CFTC guidance shows what interoperability looks like. The Financial
Stability Board has done the groundwork. What’s missing is turning those
principles into working arrangements.
Third, start with what’s already working. The UK’s Digital
Securities Sandbox should be the starting point for jointly supervised testing
of cross-border activity. HSBC was the first firm approved to go live in the
Sandbox this month, operating as a digital securities depository for bond
issuance and settlement.
That kind of real-world proof of concept does more for
confidence than any number of consultation papers—the question now is whether
supervised activity can extend across borders, not just within them.
The competition of the past five years produced the
frameworks we now have. Coordinating on frameworks that each country built
independently and takes pride in is hard. The alternative is three serious,
well-built systems that cannot work together and that serve no one.
The pieces are there. Global policymakers will need to
connect them.
The central debate in digital asset policy used to be
whether to regulate at all. That question is now settled. MiCA’s transitional
period ended July 1st, 2026; the UK finalized its cryptoasset rulebook on June
30th; the US celebrated the one-year anniversary of the
GENIUS Act becoming law; and the SEC and CFTC issued joint guidance in
mid-March that classified many digital assets as digital commodities.
What now keeps industry participants and policymakers up at
night is whether rules written in Washington, London, and Brussels can
interoperate and work alongside one another.
The end of MiCA’s transitional period triggered a major
shakeout in the European market. Of the more than 1,200 firms previously
operating under national frameworks, only around 244 secured authorization. The
UK’s full regime goes live in October 2027, while in the US, perpetual futures
were brought onshore in May 2026, the GENIUS Act takes effect in January 2027,
and negotiators continue work to finalize and pass the CLARITY Act.
Recently, the Transatlantic Taskforce for Markets of the
Future issued a joint US-UK statement affirming stablecoins as an important
vehicle for innovation in digital money and committed to working together to
develop clear, consistent regulatory pathways forward to enable stablecoins to
flourish between the two jurisdictions.
In a first for digital assets policy, two of the world’s
major financial jurisdictions are developing interoperable and convergent
frameworks designed to enable and promote digital asset-based finance. That
consensus is new, and it matters.
However, agreeing that something belongs inside the perimeter
isn’t the same as building one that works across borders. Take a stablecoin
issued in the UK, held by a customer in the EU, and used to settle a
transaction with a US institution. The transaction may happen almost instantly,
but the rules covering reserves, redemption, custody, reporting, and insolvency
still sit across three separate systems.
The goal shouldn’t be identical rules everywhere. We should
aim to make sure different regimes offer broadly comparable protections and
recognize regulated activity taking place elsewhere.
Why Frameworks Alone Are Not Enough
Having frameworks in place and having frameworks that work
together are different things. The technology hasn’t slowed down while
legislation was being written. DeFi, tokenization, and agentic payments are
moving from experiment to infrastructure.
Each jurisdiction built its framework for its own market,
legal system, and political moment, producing serious rulebooks that are not
designed to talk to each other.
Stablecoins illustrate this most sharply. Issuers face
different rules on what counts as reserves, where those reserves are held, how
quickly customers can redeem, and what happens if the issuer fails. These
differences are manageable for a single-market issuer. They become structural
problems the moment a stablecoin crosses borders.
Making regimes work together doesn’t mean erasing those
differences. It means agreeing that reserves are available, customers can
redeem, assets are protected, and regulators know who’s responsible if
something goes wrong.
The networks moving tokenized assets are global, while the
firms using them remain accountable to national regulators. The challenge is
keeping that accountability without adding friction every time an asset crosses
a border.
What Happens If We Get This Wrong
The consequences fall across three areas, and none are
abstract.
For firms, the cost compounds. Running separate legal,
compliance, and reporting structures suppresses the ability for firms to
quickly scale and pushes businesses toward whichever market is easiest to
navigate, including those markets with no regulatory frameworks in place. For
instance, MiCA’s compliance burden falls disproportionately on smaller firms,
which face many of the same requirements as much larger exchanges.
For the financial system, fragmentation blurs the full
picture. One regulator may oversee the issuer, another the reserves, another
the platform. If regulators aren’t already working together, especially in a
domestic capacity, let alone international interoperability, responding to a
market failure or stress becomes significantly harder – the costs of which can
be immense.
For economies, investment flows toward markets offering both
regulatory clarity and access. The inability to bridge regulatory distinctions
between markets will affect how capital moves and where it moves.
The countries
setting the standards now will shape the rules for the next era of financial
markets, which is why the establishment of the Taskforce and the recent
statement are so critical to building this next era underpinned by democratic
values.
What Needs to Happen
The tools for interoperability already exist. The EU
demonstrated that a single rulebook can work across 27 countries. The US
has created a federal framework for payment stablecoins and begun
clarifying the roles of its main market regulators. The UK built the Digital
Securities Sandbox, the only live supervised testing environment for digital
securities anywhere in the world.
Three things can happen now, without new laws.
First, governments need a clearer process for deciding when
another jurisdiction’s rules offer comparable protections. The GENIUS Act lets
foreign stablecoin issuers operate in the US where the
Treasury Department judges their home rules comparable.
The UK and US
should use the Transatlantic Taskforce to agree on what that comparison covers
as a basis for determinations by the Stablecoin Certification Review Committee,
including on the topics of reserves, redemption, safeguarding, reporting, and financial
crime controls, and bring other major markets into the discussion.
Second, regulators need practical arrangements for
supervising cross-border activity. Common definitions help, but aren’t enough.
Authorities need clear channels for sharing information, coordinating
enforcement, and deciding who leads if an issuer fails.
Just released – ABA and 52 state banking associations urge @USTreasury to uphold GENIUS Act’s ban on stablecoin interest: https://t.co/2P2jelAuAg
— American Bankers Association (@ABABankers) November 4, 2025
The March 2026 joint
SEC-CFTC guidance shows what interoperability looks like. The Financial
Stability Board has done the groundwork. What’s missing is turning those
principles into working arrangements.
Third, start with what’s already working. The UK’s Digital
Securities Sandbox should be the starting point for jointly supervised testing
of cross-border activity. HSBC was the first firm approved to go live in the
Sandbox this month, operating as a digital securities depository for bond
issuance and settlement.
That kind of real-world proof of concept does more for
confidence than any number of consultation papers—the question now is whether
supervised activity can extend across borders, not just within them.
The competition of the past five years produced the
frameworks we now have. Coordinating on frameworks that each country built
independently and takes pride in is hard. The alternative is three serious,
well-built systems that cannot work together and that serve no one.
The pieces are there. Global policymakers will need to
connect them.
