Crypto regulation in the world weekly digest #164

USA

The US SEC has approved generic listing standards for commodity-based ETFs, including those holding cryptocurrencies (spot crypto ETFs), allowing national securities exchanges (such as NYSE, Nasdaq, and Cboe) to list these ETFs without requiring individual, case-by-case SEC approval for each product. This change reduces the approval timeline drastically from up to 240 days to about 60-75 days or less. It streamlines the process, cuts administrative costs, and broadens the range of crypto ETFs that can launch more quickly and efficiently.

The rules also require that the underlying cryptocurrencies must trade on regulated futures markets for at least six months or be part of an existing ETF with significant exposure (at least 40%) for eligibility. The new framework allows faster, more cost-efficient listings for ETFs tied to multiple digital assets, with the Grayscale Digital Large Cap Fund (featuring Bitcoin, Ethereum, XRP, Solana, and Cardano) being the first multi-asset crypto ETF approved under these rules.

The SEC also authorized in-kind creation and redemption mechanisms for ETFs, allowing authorized participants to exchange underlying crypto assets directly, reducing market friction.

These changes open the door to a surge in new crypto ETF launches, potentially including altcoins and thematic or novelty ETFs, starting as early as October 2025.

Pakistan

Pakistan is preparing to legalize and regulate cryptocurrencies through the proposed Virtual Assets Bill 2025. This legislation aims to modernize the financial ecosystem by establishing a comprehensive regulatory framework and a dedicated Pakistan Virtual Asset Regulatory Authority to license and supervise Virtual Asset Service Providers. This move includes plans for regulated crypto exchanges, AML/counter-terrorism financing compliance, investor protection, and the launch of a central bank-backed digital rupee. The new framework seeks to bring transparency, security, and controlled adoption of digital assets, signaling a major policy shift from outright ban to regulated legalization. This is expected to enable Pakistan to benefit from fintech innovation, blockchain technology, and integration into the global digital economy while managing risks effectively.

Pakistan has long banned cryptocurrencies primarily due to concerns over money laundering, financial instability, lack of consumer protection, and regulatory oversight challenges. The State Bank of Pakistan (SBP) and the Ministry of Finance have maintained that crypto transactions are illegal, citing risks associated with unregulated digital assets facilitating illicit finance and terror funding. The ban was reinforced by an SBP directive in 2024 and strict enforcement by the Financial Monitoring Unit, which refers crypto-related cases to law enforcement agencies. This conservative stance was also due to the absence of a clear legal framework and oversight body for digital assets.

Right now, Pakistan is actively inviting global VASPs to enter its market. Recently, PVARA has issued an official call for Expressions of Interest from leading international crypto exchanges and VASPs to participate in the emerging digital economy. To qualify for a license in Pakistan, global VASPs must already hold licenses from reputable international regulators such as the US SEC, UK FCA, EU VASP framework, UAE VARA, or Singapore's MAS. This invitation is part of Pakistan’s strategy to create a transparent, regulated crypto market and attract global investment and expertise into its rapidly growing virtual asset sector, which has over 40 million users and an estimated $300 billion in annual trading volume. PVARA emphasizes a collaborative approach to building Pakistan’s digital financial future with established global partners.

The EU

The European Union, where one of the most comprehensive legal frameworks for crypto is in force, has approved a roadmap to launch the digital euro, aiming to strengthen Europe’s strategic autonomy in digital payments and provide a sovereign digital currency alternative to dominant US-based payment systems like Visa and Mastercard. The roadmap includes finalizing a comprehensive technical and regulatory «Rulebook» by October 2025, which will outline aspects such as payment processes in stores and online, security measures, fraud prevention, and innovative features like QR code payments and offline usability.

EU finance ministers have agreed on giving themselves a say before issuing the digital euro, including setting limits on how much digital euro each resident can hold to prevent bank runs. The European Central Bank leads the project, which started preparation in November 2023, and the final decision to launch the digital euro depends on completing EU legislation. The digital euro is seen as critical for enhancing Europe’s payment system independence, reducing reliance on foreign providers, and supporting the digital economy's growth. Once legislation is passed, it is expected to take around 2.5 to 3 years for the ECB to roll out the digital euro to the public.

There has been significant public discussion and some misinformation circulating on social media about privacy concerns and the potential implications of the digital euro, the overall response appears to be cautious but constructive. The ECB and other EU institutions have been actively engaging stakeholders, including consumer groups and merchants, to ensure the digital euro is user-friendly, privacy-protecting, and inclusive.

Public concerns mainly focus on privacy protection and the impact on traditional banks, as consumers are afraid about the impact that a digital euro and other digital currencies could have on regulators' powers and their ability to monitor financial transactions.

News from other countries:

• Binance is reportedly in advanced discussions with the U.S. Department of Justice to terminate independent compliance monitoring years ahead of schedule, which was initially imposed as part of its 2023 settlement for violations related to money laundering, sanctions evasion, and operating as an unlicensed money transmitter. The monitoring was conducted by third-party firms appointed by the DOJ and FinCEN to oversee Binance's compliance program.

• Russia is actively planning to create regulations for stablecoins by the end of 2025. The Ministry of Finance and the Central Bank of Russia are jointly discussing rules for stablecoins to align with global regulatory trends while prioritizing the stability of the Russian economy and the ruble. Key aspects likely include requiring stablecoin issuers to maintain equivalent fiat reserves, ensure transparency via audits, and limit mass adoption to protect the national currency.

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