Three paths of encryption regulation: U.S. financialization, high thresholds in Europe, and Switzerland seeking balance.

[Coin World] The global encryption regulatory landscape is becoming fragmented.

The United States is following a financialization route. Through stablecoin-specific legislation and market structure reforms, regulators are paving the way for institutional investors. This approach is clear and direct—reducing the entry threshold for large funds with a clear legal framework to attract traditional financial giants. The effects are also evident, with institutions continuously pouring in.

Europe has chosen a strict approach. The MiCA framework covers the full chain of compliance requirements for asset issuance, trading, and custody. It must be said that this framework is excessively detailed. But the problem arises: high costs. Especially for small and medium-sized innovative projects, compliance costs may directly stifle creativity. The space for innovation is compressed, which is an unavoidable cost.

What does Switzerland do? It is caught between the two. It has requirements for risk management, but it does not stifle innovative projects. This balanced approach has attracted many project teams to explore.

Looking down, these differences among countries will produce a chain reaction. Companies will choose their registration locations based on regulatory friendliness, and investors will seek better trading environments across borders—jurisdictional arbitrage will become the norm. The encryption industry will reorganize and cluster along favorable regulatory terrains. Ultimately, whoever has a clear framework and strong enforceability of rules will win this competition.