Summary

At the beginning of 2026, a piece of news regarding the nomination of the Federal Reserve Chair can trigger fluctuations in the cryptocurrency market, indicating that crypto assets have become highly embedded in the macro policy environment. Policy factors are shifting from background variables to core elements affecting market structure.

Looking back over the past decade, cryptocurrency regulation has gone through three stages: early ambiguity and ex-post enforcement, followed by a period of gradually clarified direction but with rules yet to be implemented, until 2025 when it began to enter a true execution phase. Regulation is no longer just chasing risks but is actively intervening in market structure design, clarifying who can participate, how assets are custodied, and who bears the responsibility for clearing.

Policies no longer simply correspond to bullish or bearish outcomes. They resemble a financial order engineering project, reshaping market structure through institutional arrangements. Stablecoins are incorporated into the asset-liability management logic, increasingly resembling constrained payment and funding intermediaries; exchanges and service providers are included in the licensing and capital requirement system; the leverage and clearing structures of DeFi are beginning to be viewed through the lens of systemic risk; Asia is adopting a licensed open approach, while Europe and the U.S. are gradually clarifying boundaries through legislation and enforcement. Global regulatory logic is converging: risks must be visible, responsibilities must be traceable, and failures must be clearable.

Entering 2026, policy focus is further shifting upwards. From investor protection and price volatility, it is turning to systemic issues such as liquidity structure, clearing mechanisms, and cross-border capital transmission. Do stablecoins affect the money market? Can on-chain leverage spill over into traditional finance? Will cross-border payments and PayFi change the foreign exchange and payment regulatory framework? These questions are becoming new policy focal points.

In such an institutional environment, the competitive logic of the cryptocurrency market is changing. Structures characterized by high leverage, ambiguous responsibilities, and opaque reserves will become increasingly unsustainable; designs with clear reserves, risk isolation, and defined clearing paths will have more long-term space. Innovation will not disappear but will shift from disorderly expansion to sustainable expansion.

Understanding policy evolution is not just a macro judgment but is a prerequisite for understanding the future market structure. The form of cryptocurrency is being institutionalized and reshaped. Those who can find a balance between transparency and efficiency are more likely to navigate the next cycle.

Table of Contents

1. Policy is not bullish or bearish, but a "financial order engineering project"

1.1 Research Background: 2025 - 2026 is a true watershed for cryptocurrency policy

1.2 Why treating regulation as a "price variable" gradually becomes ineffective in 2025

1.3 Cryptocurrency policy is transitioning from "attitude expression" to "institutional execution"

2. Timeline: Policy evolution from "ambiguity period" to "execution period"

2.1 2018 - 2022: Regulatory ambiguity period, the "barbaric growth period" of the cryptocurrency market

2.2 2023 - 2024: Policy tuning period, direction clear but not yet implemented

2.3 2025: The year rules begin to be truly enforced

3. Core changes in 2025: Not a bill, but a change in regulatory logic

3.1 United States: From "enforcement regulation" to "institutional redistribution"

3.2 EU MiCA: The real landing effect in 2025

3.3 Asian Path: Licensed opening rather than loose regulation

3.4 Summary: Regulatory logic consensus in 2025

4. 2026 Policy Focus Outlook: Shifting from price risk to systemic risk

4.1 The regulatory focus on stablecoins may shift to the macro-financial framework

4.2 On-chain leverage and clearing risks: Does DeFi have systemic safety?

4.3 PayFi and cross-border payments: Regulatory focus on on-chain payment paths

4.4 Keywords for 2026: Non-price risks, systemic importance, cross-market transmission

5. How policy reshapes the structure of the cryptocurrency market

5.1 Changes in product forms: From high-leverage speculation to risk isolation design

5.2 Changes in funding paths: From anonymous liquidity to identifiable liquidity

5.3 Changes in risk structure: Who bears the tail risk

6. Outlook and Trends: From "compliance adaptation" to "structural choice"

6.1 Compliance is no longer a cost item but a market access right

6.2 The market will move towards a "dual-track system": compliant financial layer vs on-chain innovation layer

6.3 Stablecoins will become the core entry point of "new financial infrastructure"

6.4 Regulation will shift from "rule-making" to "data-driven"

6.5 Pattern evolution: From "open competition" to "structural concentration"

6.6 The compliance path of DeFi: From "protocol neutrality" to "interface compliance"

6.7 Track repricing: From "traffic competition" to "structural competition"

7. Conclusion: A new phase of the cryptocurrency market under the institutional environment

References

1. Policy is not bullish or bearish, but a "financial order engineering project"

In early February 2026, the cryptocurrency market experienced a rapid decline triggered by a macro policy signal: Trump nominated former Federal Reserve Governor Kevin Warsh as the next Federal Reserve Chair on X. After the news was announced, the market quickly repriced future monetary policy expectations, the dollar strengthened, and risk assets were generally under pressure, leading to a noticeable chain reaction in the cryptocurrency market. This event shows that the Web3 market has entered a phase of high sensitivity to policy and can respond instantly. Unlike the past, which was mainly driven by its own cycles and narratives, at the beginning of 2026, even an uncertain policy signal was enough to quickly transmit to cryptocurrency asset prices through risk appetite, leverage adjustments, and capital flows. The policy changes from 2025 to 2026 are no longer just background conditions for the market but are becoming core variables that affect market structure. Studying the historical logic and future direction of policy is no longer a supplement to macro judgment but a necessary prerequisite for understanding how the cryptocurrency market operates and its long-term evolution direction.

1.1 Research Background: 2025 - 2026 is a true watershed for cryptocurrency policy

Looking back at the evolution of cryptocurrency policy over the past decade, a clear break can be observed: from 2018 to 2022, regulation was more about chasing the market. The main task of regulatory agencies was to remedy and enforce after risks had already been exposed. In response to issues such as the ICO bubble, exchange collapses, stablecoin de-pegging, and algorithmic model failures, the overall response was clearly reactive.

The reason 2025 is viewed as a policy turning point is not because of the passage of a heavyweight bill, nor is it due to a sudden shift in regulatory attitude to friendly or tough, but because regulation began to shift from ex-post responses to ex-ante design. The focus of policy discussions underwent a fundamental change: no longer just concerned with which behaviors are illegal, but intervening in the market structure itself in advance, redefining which businesses can exist, how they should exist, and who bears the responsibilities for clearing, backstopping, and risk isolation. During this stage, multiple jurisdictions gradually formed a consensus: the cryptocurrency market is no longer a marginal experimental field that can remain outside the system for a long time, but a structural market that must be managed within the existing financial order.

Entering 2026, this change became even more pronounced. The focus of discussions is no longer whether to regulate, but how to regulate, to what extent, and who is responsible. Regulation began to manifest as specific, executable institutional arrangements, including access standards, compliance boundaries, risk isolation mechanisms, and cross-market coordination rules. In this sense, 2025-2026 constitutes a true watershed for cryptocurrency policy: regulation is no longer just about limiting the market but is beginning to reshape the operational structure of the market itself.

1.2 Why treating regulation as a "price variable" gradually becomes ineffective in 2025

For a long time, the market has been accustomed to understanding the impact of policy in a highly simplified manner: passing a bill is bullish, delaying approval is bearish; tightening regulation means bearish sentiment, and friendly policy statements mean bullish sentiment. This logic was not entirely ineffective in the early stages, as the main impact of policy at that time was indeed concentrated on expectations and sentiment. However, as the regulatory logic changed, this understanding began to fail significantly in 2025. The core of policy concern is no longer the price itself but the structural risks behind the price. From a regulatory perspective, what is truly concerning is not how much a particular token rises or falls, but whether risks will spill over into the traditional financial system, how leverage is created and transmitted, and who should bear the responsibility for clearing and liability in extreme situations.

The way policy impacts the market is undergoing a transformation: it no longer acts on prices by directly influencing sentiment but shapes market structure over the long term through institutional design. Regulation will not tell the market which direction to go, but will clarify which businesses can obtain compliant liquidity, which models will be systematically compressed, and which participants have long-term survival space. In this framework, judgments like "passing a bill is bullish" seem overly simplistic. Some policies may suppress activity in the short term, but in the medium to long term, they enhance the safety and certainty of capital entry; conversely, some seemingly loose statements, if lacking execution mechanisms, often fail to truly change market operations. Therefore, since 2025, policy has ceased to be a simple price variable and has become a key factor determining the direction of market structure evolution.

1.3 Cryptocurrency policy is transitioning from "attitude expression" to "institutional execution"

If one were to summarize the policy changes from 2025 to 2026 in one sentence, it would be: cryptocurrency regulation is moving from uncertainty to structural constraints. The early market's uncertainty mainly stemmed from concerns about "whether there will be a one-size-fits-all approach"; however, from 2025 to 2026, this uncertainty is being replaced by a clearer, but also more constraining, rule system. Regulation does not promise market growth but clarifies which behaviors will no longer be tolerated and which paths have long-term compliance potential. Meanwhile, the regulatory focus has shifted from attitude expression to institutional execution. Policies are gradually being implemented as actionable rules, including licensing systems, information disclosure requirements, and the division of clearing and custody responsibilities. Compliance is no longer just a narrative label but is beginning to translate into real operational costs and competitive thresholds.

In this process, the way policies influence the market is also changing: it is no longer primarily reflected in short-term volatility but is continuously shaping funding structures, product forms, and participant roles through institutional arrangements. This change often occurs slowly but is highly irreversible. Based on this judgment, this article will no longer revolve around the "bullish or bearish" nature of a single policy but will attempt to answer a more core question: under the new policy framework, what kind of structure will the cryptocurrency market be reshaped into, and which participants will benefit or be eliminated in this process?

2. Timeline: Policy evolution from "ambiguity period" to "execution period"

When we extend the timeline, we find that cryptocurrency policy is not a random response but evolves along a clear path, moving from ambiguity to executability, from attitude expression to institutional arrangements.

2.1 2018 - 2022: Regulatory ambiguity period, the "barbaric growth period" of the cryptocurrency market

From 2018 to 2022, it was a typical regulatory ambiguity period for the cryptocurrency market. The core feature of this stage is that regulation had not yet formed a unified logic that could be anticipated, understood, and internalized by the market. From a policy perspective, most rules at that time remained at the qualitative judgment level: whether digital assets belong to securities, commodities, or payment instruments, different institutions and jurisdictions provided inconsistent answers. Enforcement exhibited clear fragmentation, often intervening only after risks had become apparent, rather than setting clear boundaries in advance. The cryptocurrency market gradually formed a highly self-reinforcing structure. From 2018 to 2022, the core innovations in the market revolved almost entirely around efficiency and expansion: DeFi lending and decentralized exchanges rapidly developed, algorithmic stablecoins, cross-protocol yield stacking, permissionless derivatives, and high-leverage products continuously emerged. Projects and platforms generally prioritized growth speed over compliance design.

In this process, leverage was continuously stacked, but there were no clear boundaries for clearing and responsibility. Stablecoins, lacking transparent reserves and audit constraints, effectively assumed the role of the settlement and liquidity hub within the system; while the yield structures formed through liquidity mining and cross-protocol combinations retained a large amount of risk within the system without corresponding isolation or backstop mechanisms. Many models that were then seen as innovations were essentially radical reorganizations of traditional financial logic in spaces where regulation had not yet intervened in structural design. This stage exhibited the typical "innovation first, rules lag behind" characteristic. When access thresholds, responsibility attribution, and risk boundaries are unclear, the market will naturally evolve along the path of lowest cost and fastest expansion, laying the structural groundwork for subsequent regulatory intervention. The period from 2018 to 2022 was not a failure of regulation but rather a time when regulation had not yet truly entered the structural design phase.

2.2 2023 - 2024: Policy tuning period, direction clear but not yet implemented

From 2023 to 2024, cryptocurrency policy entered a tuning period. The regulatory directions of major jurisdictions began to gradually converge, but an executable and stable institutional framework had not yet been fully established. Regulation began to clarify "which behaviors are unacceptable," but still did not provide a complete set of long-term operational rules.

United States: Clear enforcement, legislative lag

In the United States, this stage is particularly evident. Regulatory agencies continuously released signals to the market through high-frequency enforcement actions, denying certain business models and redrawing compliance boundaries. However, at the same time, a unified and clear federal legislation has remained absent, making it difficult for the market to accurately assess long-term compliance paths despite sensing regulatory attitudes. Several landmark cases reinforced this signal. In 2023, FTX founder Sam Bankman-Fried was convicted of fraud and conspiracy, clearly conveying the regulatory stance that core responsible parties must bear legal consequences. The founder of the cryptocurrency lending platform Celsius Network, which went bankrupt in 2022, was prosecuted in 2023, pleaded guilty in 2024, and was sentenced in 2025, further strengthening expectations of accountability for high-yield promises and misuse of customer funds. Meanwhile, the developer of the privacy mixing protocol Tornado Cash faced criminal charges in 2023, sparking widespread discussions within the industry about the responsibility boundaries of decentralized tools. Although Congress pushed several legislative proposals during the same period, as of 2024, a unified, executable regulatory system had not yet formed. This state led the market to continuously test the red lines in practice, forming a pattern of direction being set while rules had not yet landed.

EU and Asia: Clearer paths

In contrast, the EU completed a more systematic institutional design during this stage. The introduction of MiCA first defined the issuance, service, and market boundaries of crypto assets within a complete framework, clarifying that they would be incorporated into the existing financial regulatory system. Some financial centers in Asia chose a more strategic path. By implementing licensing systems and clear compliance frameworks, they allowed certain businesses to operate within the regulatory view while maintaining clear risk boundaries. Hong Kong began issuing licenses to virtual asset trading platforms, with HashKey Group and OSL being among the first local exchanges to receive approval. Singapore raised access thresholds through a tiered licensing system. This "licensed opening" provided a more predictable development path for the market and created real examples for institutional participation and compliance innovation. The tuning during this stage does not equate to rules having landed. It is more like a collective signal sent by regulators to the market: the cryptocurrency market will no longer remain in a gray area for a long time, and the core of future competition will no longer just be technology and traffic, but compliance capability and structural design.

2.3 2025: The year rules begin to be truly enforced

If the previous stage addressed "where to go," then starting in 2025, regulation began to systematically answer "how to go." The changes of this year did not stem from a single shocking bill but were reflected in the specific enforcement of rules. The focus of regulatory attention fell on three fundamental yet long-avoided questions: who is qualified to issue and provide services, where funds should be custodied, and who bears responsibility when problems arise. In the EU, MiCA entered a substantive enforcement phase in 2025, with stablecoin issuers and crypto service providers beginning to accept ongoing regulation under a unified framework. In Asia, issuance qualifications, custody arrangements, and responsibility divisions were further refined, with stablecoins gradually transitioning from "market consensus tools" to regulated payment and settlement components. In the U.S., even though legislation had not yet fully formed, the custody, clearing, and disclosure requirements surrounding spot Bitcoin ETFs effectively established a compliance paradigm for capital entering the cryptocurrency market. Regulation began to reshape the market's operational structure through the enforcement of basic rules. Compliance shifted from an attitude issue to a question of whether one can sustain operations. Some models were not directly banned but naturally lost feasibility under constraints of responsibility and cost. The year 2025 became a key node for the cryptocurrency market's transition from a "expandable structure" to a "sustainable structure." Rules began to truly land, and for the first time, the market was forced to confront a reality: in a system that requires accountability, who can still remain?

3. Core changes in 2025: Not a bill, but a change in regulatory logic

The changes in 2025 are not necessarily marked by the passage of a specific bill but are more reflected in a fundamental shift in regulatory narrative, power structure, and institutional design thinking.

3.1 United States: From "enforcement regulation" to "institutional redistribution"

In recent years, the U.S. governance approach to the cryptocurrency industry has heavily relied on enforcement. The SEC has brought many projects under the securities regulatory framework through "case law," while the CFTC has had limited involvement in derivatives and futures markets. On the surface, this appears to be a hardening of regulation, but in essence, it is a stopgap measure under institutional vacancy. By 2025, the problems could no longer be resolved through enforcement: on one hand, the boundaries of enforcement became increasingly blurred, and pressure on the judicial system continued to rise; on the other hand, institutions, banks, and payment systems began to substantively enter the cryptocurrency field, making the original handling model unsustainable for scaled financial activities. U.S. regulation began to shift from "who violates, punishes whom" to a more fundamental question: who has the authority to regulate what? What is the basis for regulation? Different financial attributes of crypto assets should be placed into which institutional containers?

The true significance of the CLARITY Act: not whether it passes, but the boundary-drawing logic

The CLARITY Act, formally known as the Digital Asset Market Clarity Act of 2025, is a legislative attempt by the U.S. Congress to systematically restructure the digital asset market structure against a backdrop of long-term regulatory uncertainty. The bill was introduced in the House on May 29, 2025, and passed the House in July of the same year with significant bipartisan support, becoming the first complete cryptocurrency market structure bill to pass a single chamber of Congress. As of April 2026, the CLARITY Act has not yet passed the Senate and remains in a state of ongoing suspension and repeated negotiation: on one hand, the Senate has not yet determined a new review timetable, and the legislative process has been delayed multiple times; on the other hand, significant disagreements remain on key issues such as stablecoin yields, the scope of DeFi regulation, and conflicts of interest between the banking and cryptocurrency industries, making it difficult for the bill to enter the final voting process. Nevertheless, the bill is still viewed as the core framework for U.S. digital asset regulation and continues to receive policy-level attention (including public calls from Treasury officials to promote legislation). However, with the midterm elections approaching in 2026, there remains considerable uncertainty about whether it can ultimately land within this congressional cycle.

In terms of content, CLARITY is not a specialized bill targeting a single issue but a "market structure bill," whose core is not to encourage or restrict certain types of cryptocurrency activities but to answer a more fundamental question: how should the digital asset market be incorporated into the existing financial regulatory system? Around this goal, the core content of the CLARITY Act can be summarized in four aspects.

First, it clarifies the legal classification framework for digital assets. CLARITY distinguishes between different types of digital assets for the first time at the legislative level, focusing on the distinction between "investment-type digital assets" and "mature digital commodities." Some tokens may be classified as securities during early financing and centralized control stages; however, when the network no longer relies on a single entity and tokens are primarily used for network functionality or transaction settlement, their legal attributes can change. Secondly, it introduces a "dynamic regulatory attribution" mechanism. Unlike the previous enforcement logic that once identified, always classified, CLARITY allows digital assets to transition from the SEC's securities regulatory system to the CFTC's regulated commodity or digital commodity system upon meeting specific conditions. This design essentially acknowledges that the decentralization process itself has legal significance.

Third, it clarifies the power boundaries between the SEC and CFTC. CLARITY delineates regulatory responsibilities through legislation: the SEC is primarily responsible for securities-type digital assets involving financing, issuance, and investment return expectations; the CFTC is responsible for decentralized, transaction, and usage-focused digital commodities and their derivatives markets. This arrangement aims to end the long-standing uncertainty of jurisdictional disputes through enforcement. Finally, it layers compliance responsibilities for market participants. The bill does not simply place all responsibilities on project parties but sets differentiated obligations for different roles, including project parties, trading platforms, brokers, custodians, etc., including information disclosure, registration requirements, user asset isolation, and risk management responsibilities.

Based on this institutional design, the analytical significance of the CLARITY Act unfolds. From 2021 to 2024, the U.S. did not form a systematic legislative framework for cryptocurrency assets, and regulation primarily relied on the SEC to define rule boundaries through enforcement actions. Many projects, trading platforms, and infrastructure institutions were often informed of their classification as securities, brokers, or illegal exchanges only after being sued or investigated. This ex-post discretionary regulation gradually triggered dissatisfaction among the industry, the judicial system, and some legislators. In this real dilemma, CLARITY was proposed. Its core goal is not to relax regulation but to replace enforcement with institutions and rules with uncertainty. Therefore, the true significance of CLARITY lies not in whether it formally passes at a certain point in time but in its first attempt to elevate the boundary-drawing logic between commodities and securities from case-by-case enforcement to a market-anticipatable institutional framework.

Once this boundary-drawing logic is institutionalized, its impact will be structural: the SEC and CFTC will no longer compete for regulatory power through cases but will obtain clear divisions of labor through legislation. Project parties can no longer rely on regulatory ambiguity for the long term but must clarify their compliance paths at the design stage. Trading platforms and infrastructure institutions will also be forced to make clear choices regarding license types, business boundaries, and risk isolation. Therefore, CLARITY is not a simple cryptocurrency-friendly bill but an experiment in redistributing market structure and regulatory power that the U.S. regulatory system is attempting to complete. It marks a shift in U.S. cryptocurrency regulation from a heavy reliance on enforcement discretion to a structured, predictable institutional governance logic.

Stablecoin Legislation: Surface as currency, core as asset-liability management

Compared to the token attribute dispute, stablecoins became the fastest advancing and most consensual legislative direction in U.S. cryptocurrency regulation in 2025. This change stems from a high degree of consensus among regulators regarding the nature of stablecoins: stablecoins are not a technical innovation issue but a standard financial intermediary and payment tool issue. At the legislative level, this consensus is concentrated in a series of bills surrounding stablecoins, among which the most representative are the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) and the previously discussed federal stablecoin regulatory framework draft. Although there are still differences in specific provisions, there is a high degree of consistency in core directions.

From an overall design perspective, U.S. stablecoin legislation views stablecoins as redeemable financial instruments issued to the public based on dollar-denominated assets as liabilities. Therefore, the legislative focus revolves around the issuing entity, asset-liability management, redemption capability, and systemic risk. Specifically, these bills focus on answering four core questions, which also constitute the true core of stablecoin regulatory logic.

First, what are the reserve assets, and how are they custodied? Bills like GENIUS clearly emphasize that compliant stablecoins must be based on high liquidity, low-risk assets, typically limited to cash, short-term government bonds, or equivalent cash assets. At the same time, reserve assets must be strictly isolated from the issuer's own assets and held by compliant custodians. The core purpose of this design is to ensure that the issuing institution has real and executable redemption capabilities in extreme situations.

Second, the issue of who owns the income generated by reserve assets. This is the most sensitive and controversial part of the stablecoin business model. As the scale of stablecoins expands, the interest income generated by their reserve assets will become substantial. The legislative discussion focuses on whether this income constitutes the use of public funds, whether it has attributes similar to deposits or wealth management products, and whether it needs to be subject to constraints similar to banks or money market funds. This question directly determines whether stablecoin issuers resemble technology companies or financial institutions.

Third, whether stablecoins are regarded as payment tools and payment infrastructure. Several bills explicitly include stablecoins in the regulatory discussion framework for payments. Once stablecoins are widely used for on-chain or off-chain payments, cross-border settlements, and merchant clearing, the regulatory focus will no longer be on asset issuance but on payment security, anti-money laundering, systemic stability, and operational continuity. This means that stablecoin issuers will need to bear compliance responsibilities similar to payment institutions or even systemic financial infrastructure.

Fourth, who bears the redemption responsibility and who is the last risk bearer? In times of market volatility or confidence crises, whether stablecoins can be redeemed in full and at any time is the issue that regulators are most concerned about. Relevant bills generally require clear redemption mechanisms, time windows, and legal responsibility attribution, and discuss whether higher levels of regulatory constraints need to be introduced to prevent stablecoins from becoming sources of systemic risk in extreme situations.

Putting these four points together reveals a trend: the regulatory logic of stablecoins has completely detached from the technical context of crypto assets and shifted to the asset-liability management and risk management framework of traditional financial regulation. Starting in 2025, in terms of institutional design, stablecoins are increasingly resembling the following types of traditional financial forms: narrow banks supported by high-quality assets, money market funds with high liquidity and strict investment restrictions, or payment-type financial institutions subject to strict constraints. This also means that stablecoins are viewed as a form of financial institution rather than merely a technical product. This change not only reshapes the survival logic of stablecoin projects themselves but also profoundly impacts the underlying structure of the entire cryptocurrency market, as almost all DeFi protocols, exchange liquidity, clearing mechanisms, and cross-border capital flows ultimately rely on stablecoins as this financial intermediary layer.

3.2 EU MiCA: The real landing effect in 2025

If the U.S. was still in a phase of institutional formation but not yet fully landed in 2025, then the EU's MiCA (Markets in Crypto-Assets Regulation) is the first large-scale cryptocurrency regulatory framework to truly enter a comprehensive execution phase. In terms of timing, MiCA is not a new system that appeared in 2025, but it was during 2024-2025 that its core provisions began to impose substantive constraints on the market. Therefore, the significance of MiCA is no longer just about what the rules look like but can be specifically tested: which provisions truly changed market behavior? Which parts were circumvented by the market? Where are the boundaries of regulation exposed?

Which provisions were truly enforced

From a practical effect perspective, the parts of MiCA that were strictly enforced were not the grand principles most discussed but rather those that regulatory agencies could operate on and were closest to traditional financial regulatory experiences. First is the access and licensing requirements for exchanges and service providers. MiCA establishes clear registration and operational standards for crypto asset service providers (CASPs), including capital requirements, internal risk control, customer asset isolation, information disclosure, and management responsibilities. This part was enforced most clearly in 2025, as large centralized exchanges could hardly avoid compliance registration, or they would directly lose access to the EU market. Secondly, the issuance constraints for stablecoins and asset-referenced tokens. MiCA imposes clear reserve requirements, information disclosure obligations, and redemption responsibilities in extreme situations on stablecoin issuers. Especially in cases of excessive trading volume that may constitute systemic risk, issuers may face limits on issuance scale. This provision created substantial thresholds for stablecoin projects in the Eurozone in 2025 and indirectly limited the expansion methods of some dollar-pegged stablecoins in the EU market. Third is the strengthened enforcement of anti-money laundering and transaction monitoring obligations. MiCA is deeply tied to the EU's existing AML/CFT framework, requiring crypto service providers to gradually approach the compliance standards of traditional financial institutions in customer identification, transaction monitoring, and cross-border transfer records. This change directly raised compliance costs and accelerated the clearing of small and medium-sized trading platforms. From the results, the clearest message conveyed by MiCA in 2025 is: as long as you are a centralized entity providing services to the public, you cannot long remain outside of regulation.

Which provisions were "compliance arbitraged" by the market

However, MiCA is not a regulatory network completely devoid of loopholes. On the contrary, as it was implemented, the market quickly found several legal but not entirely compliant operational spaces. The most typical issue is the definition boundary of regulatory subjects. MiCA mainly targets issuers and service providers, while its constraints significantly weaken for projects that lack clear legal entities, separate front-end and protocols, or operate through decentralized governance. This allows some projects to actively weaken their role as service providers in structural design to evade MiCA. The geographic and business structure disassembly also has certain operational space. Some institutions place core technology, liquidity, or governance structures outside the EU while retaining limited functions or compliance shell companies within the EU, thus formally meeting MiCA requirements while maintaining relatively high operational flexibility in substance. This practice is not illegal but clearly weakens MiCA's actual constraints on global business. The third is the ambiguous space for DeFi and non-custodial services. MiCA has not provided a systematic regulatory framework for DeFi but has adopted a relatively restrained attitude. The practical effect in 2025 is that centralized platforms face significantly increased compliance costs, while decentralized protocols gain a relative institutional advantage in the short term, forming a kind of compliance reverse incentive. These phenomena do not mean MiCA has failed but reveal a reality: any system centered on subject regulation inevitably has arbitrage space when facing a highly modular and reconfigurable cryptocurrency market.

The real constraints of MiCA on exchanges, issuers, and DeFi

From a market structure perspective, what MiCA brought in 2025 was not a comprehensive tightening but an asymmetric impact. For centralized exchanges, MiCA effectively increased industry concentration. Rising compliance costs and unified cross-border licensing made it easier for large exchanges to bear institutional pressure, while the survival space for small and medium platforms was significantly compressed. The result is that trading liquidity in the EU market is more concentrated, but innovation elasticity has decreased. For token and stablecoin issuers, MiCA reinforced the concept of responsible parties. Project parties need to bear clear responsibilities for information disclosure, market behavior, and risk management, which somewhat suppresses high-risk, low-transparency issuance models but also raises the entry barriers for compliant projects. For DeFi, the impact of MiCA in 2025 resembles a form of delayed regulatory pressure. In the short term, DeFi benefits from being difficult to directly incorporate into the regulatory framework; however, in the long term, as front-end, interface, and governance participants gradually come under regulatory scrutiny, its institutional space is being gradually narrowed. The core signal conveyed by MiCA in 2025 is not that the EU intends to strictly control crypto but that as long as you play a clear role in the financial system, you must accept corresponding levels of regulation; yet the system itself continues to engage in ongoing negotiation and correction with the market.

3.3 Asian Path: Licensed opening rather than loose regulation

Around 2025, while Europe and the U.S. were repeatedly tugging over how to legislate and draw boundaries, some financial centers in Asia had already carved out a distinctly different path. The regulatory models represented by Hong Kong and Singapore do not simply release the cryptocurrency industry but adopt a licensed opening strategy that first sets entry points, then implements strict controls, and finally conducts continuous audits. This path appears more friendly on the surface but actually imposes higher and more specific requirements on market structure.

Singapore: Function-based regulation centered on the Payment Services Act

Singapore's cryptocurrency regulation is centered on the Payment Services Act (PSA), which functionally dissects and regulates crypto activities. Under the PSA framework, stablecoins, crypto trading, custody, and transfer activities are unified under the category of digital payment tokens (DPT) services. As long as institutions provide relevant services to the public, they must obtain licenses and continuously meet capital, anti-money laundering, risk management, and technical security requirements. The key to this design is that crypto activities are directly viewed as financial service behaviors. Regulators focus not on the technical attributes of tokens themselves but on whether they involve public funds, whether they bear payment or clearing functions, and whether they may pose systemic risks. From 2024 to 2025, Singapore further strengthened restrictions on retail investor protection, leveraged trading, and yield products through regulatory guidelines, making crypto businesses institutionally closer to traditional payment and financial intermediaries. The long-term impact of this model is that crypto institutions find it easier to obtain clear compliance paths in Singapore, but they must also accept ongoing, stringent regulatory scrutiny. The market structure thus presents characteristics of high institutionalization, low leverage, and low tolerance, making it more suitable for institutional and cross-border businesses rather than high-risk speculative markets.

Hong Kong: Entry-based regulation centered on virtual asset service provider licenses, extending to asset issuance

In contrast to Singapore's function-based regulation, Hong Kong adopts a more typical entry-based regulatory path. Its core institutional tool was initially the virtual asset service provider (VASP) licensing system led by the Securities and Futures Commission, which further expanded in 2026 to include a stablecoin issuer licensing system, gradually forming a dual regulatory structure from trading entry to core asset supply. Under the VASP framework, as long as a trading platform provides virtual asset trading services to the public, it must apply for and hold a license and comply with regulatory requirements highly similar to those of traditional securities brokers, including customer asset custody and isolation, internal control and risk management systems, information disclosure and compliance audits, and appropriate management personnel requirements. Notably, Hong Kong has not attempted to classify tokens in detail through legislation but has focused regulatory attention on platform responsibilities and intermediary behaviors; as long as a platform undertakes functions such as matching, custody, or transaction execution, it must be included in the comprehensive regulatory system.

From the actual implementation situation, the issuance pace of Hong Kong VASP (more accurately VATP) licenses has been notably cautious. As of early 2026, the number of virtual asset trading platforms that have officially obtained licenses from the Securities and Futures Commission is around 10 to 12, mainly including leading institutions like OSL and HashKey, as well as subsequent approved platforms like HKVAX, HKbitEX, Bullish, and VDX. However, "obtaining a license" does not equate to "effective business operation." Market feedback indicates that the trading scale and user recognition that have truly formed are still concentrated in a few leading platforms, while other licensed institutions are mostly in early stages: some are still building technical systems and compliance frameworks, while others are only open to institutions or a small range of users, with overall business scale and market presence relatively limited. Meanwhile, many platforms that had applied for licenses (including several leading exchanges) chose to withdraw their applications or exit the Hong Kong market. For example, mainstream exchanges like OKX, Bybit, Gate.io, and Huobi all proactively withdrew their VASP license applications during the transition period; at the same time, several small and medium platforms such as HKVAEX, IBTCEX, and QuanXLab also successively exited or terminated their application processes.

After 2025, as the participation range of retail investors gradually opens up, this system further strengthens the requirements for platform compliance capabilities and significantly raises the entry barriers for the Hong Kong market. From a structural outcome perspective, the Hong Kong model does not encourage a large influx of projects but intentionally aims to create a highly controllable cryptocurrency financial hub centered on compliant trading, asset management, and on-chain financial infrastructure. Institutions that can enter this system typically possess strong financial strength, compliance capabilities, and long-term operational expectations.

On this basis, with the formal landing of stablecoin issuer licenses in 2026, regulation further extends to the core link of "asset issuance and credit creation." The first batch of licenses was only granted to a few entities with banking or large institutional backgrounds, showing clear high barriers and concentration characteristics. Hong Kong is not only regulating the circulation market of crypto assets but is also beginning to directly intervene in the supply mechanism of the on-chain "currency layer."

Integrating the practices of Singapore and Hong Kong reveals that the so-called Asian regulatory friendliness is not about relaxed rules but about quickly incorporating crypto activities into existing financial regulatory frameworks through licensing systems. The long-term impact of this path is that the speed of innovation is relatively controllable, but systemic risks are significantly reduced; the market tends to be more institutionalized, compliant, and focused on long-term operations; and the cryptocurrency industry is clearly seen as part of the financial system rather than an exceptional existence. This also makes Asia one of the earliest regions in the global cryptocurrency market to complete the transition from gray innovation to financial infrastructure by 2025.

Stablecoin licenses: Regulation shifts from trading entry to asset issuance

In April 2026, the Hong Kong regulatory system further extended to the core link of stablecoin issuance. According to an announcement from the Hong Kong Monetary Authority, on April 10, 2026, Hong Kong officially issued the first batch of stablecoin issuer licenses, with only two institutions approved: one is HSBC Hong Kong, and the other is a joint venture company called Anchorpoint Financial (碇点金融科技有限公司), led by Standard Chartered Bank (Hong Kong) in collaboration with PCCW and Animoca Brands. In this round of licensing, regulatory authorities evaluated dozens of applications but ultimately approved only two institutions, demonstrating a very high entry barrier and a clear "limited licensing" characteristic.

Unlike the previous VASP licenses, which mainly constrained trading and intermediary behaviors, stablecoin licenses directly involve the more core financial functions of "currency issuance and credit creation." Therefore, licensed institutions must complete a series of preparatory work, including technical system testing, risk management mechanisms, reserve asset arrangements, and compliance operational systems, before officially issuing stablecoins. This change has significant structural implications: Hong Kong regulation is shifting from "trading platform entry control" to "core asset supply control," bringing stablecoins into a similar category as regulated deposit tools. At the same time, the issuance rights of licenses are highly concentrated among entities with banking backgrounds or large institutional resources, intentionally converging stablecoin issuance rights into the hands of a few high-credit participants.

Moreover, the first batch of licensed institutions is primarily composed of banks and large financial-related entities rather than crypto-native projects, reflecting the regulatory intention to use the traditional financial system as the credit starting point for stablecoin issuance, thereby reinforcing the safety and compliance constraints of reserve assets from the source. This orientation not only changes the market participation structure but also reshapes the competitive logic of stablecoins: the previously globalized pattern dominated by Tether and USD Coin is gradually evolving into a new form of "regionally regulated dominance + compliant issuer distributed competition." The functional boundaries of stablecoins are also expanding, transitioning from a medium for crypto trading to payment, clearing, and even real-world asset (RWA) settlements, exhibiting characteristics of a "financial operating system." The stablecoin track itself will shift from relying on liquidity scale to relying on credit endorsement and regulatory qualifications, significantly enhancing the concentration effect of leading players; the payment track may revolve around stablecoins, becoming the most practical application scenario; the development of RWAs will also heavily depend on stablecoins as clearing and liquidity carriers. The status of exchanges as entry points may be somewhat weakened, as the stablecoin network itself has the potential to become a new user entry point.

3.4 Summary: Regulatory logic consensus in 2025

Integrating the evolution paths of cryptocurrency regulation in various countries since 2025 reveals a clear consensus is forming: the focus of regulation is no longer on whether to protect innovation but on how to allow innovation to operate within controllable limits. When cryptocurrency applications touch real funds and real risks, they must be incorporated into the financial order. This consensus can be understood as three layers of regulatory bottom lines: risks need to be visible, responsibilities need to be assignable, and failures need to be manageable. Whether it is DeFi, stablecoins, or on-chain derivatives, the sources of assets, income structures, leverage levels, and clearing mechanisms are all being required to present themselves in a more transparent and auditable manner, with the space for black-box risk stacking clearly narrowing. At the same time, the focus of regulation is shifting from whether to decentralize to who is actually controlling the system. As long as there is parameter adjustment authority, front-end control, or governance dominance, it implies corresponding responsible parties. More importantly, regulation does not attempt to eliminate failure itself but requires that failures be isolatable, clearable, and exit-able, preventing a single project or mechanism from evolving into a source of systemic risk. The regulatory logic of 2025 does not deny Web3 but sets a clear boundary for it: visible risks, identifiable responsibilities, and manageable failures. Innovations that can operate within this framework are the ones that possess long-term survival space.

4. 2026 Policy Focus Outlook: Shifting from price risk to systemic risk

In 2026, regulatory logic will focus more on whether the cryptocurrency market will form systemic risks; if so, how to embed them within the existing financial framework for constraints? As the scale of stablecoins expands, on-chain derivatives mature, and traditional institutions deeply participate, the cryptocurrency market is gradually embedding itself into real capital flows and payment networks, changing the nature of risks. What truly needs to be discussed is no longer just the rise and fall of assets but whether the liquidity structure is robust, whether the clearing mechanism is reliable, and whether there are transmission channels between different markets.

4.1 The regulatory focus on stablecoins may shift to the macro-financial framework

In 2025, the questions were whether stablecoins are legal and who regulates them. In 2026, what may be more worthy of our attention is what financial coordinate system stablecoins will be placed in. The focus of regulatory discussions may no longer be on the issuance qualifications themselves but on what role they play in the entire financial system and whether they will produce macro-level spillover effects. Over the past few years, stablecoins have gradually completed legal identity confirmation. Mainstream markets have imposed clear requirements on issuing entities, reserve assets, redemption mechanisms, etc., through legislation or regulatory frameworks. Stablecoins have been incorporated into formal regulatory systems and are no longer innovative tools floating outside the system. The deeper question is: are they merely payment tools, or are they a funding carrier with financial intermediary attributes?

Currently, many bills define stablecoins as payment-type tools, emphasizing their function as on-chain settlement mediums, with regulatory focus on anti-money laundering, fund traceability, and one-to-one redemption capabilities. From this perspective, stablecoins resemble digital clearing tools, with their core task being to enhance payment efficiency rather than to bear credit expansion functions. However, as their scale expands, stablecoin reserves are heavily allocated to short-term government bonds and other assets, and their capital volume can influence the structure of the money market. In this context, the regulatory perspective may further rise, shifting from "payment security" to "financial stability." If stablecoins are viewed as quasi-money market tools, the focus will shift to asset maturity matching, liquidity stress testing, and concentrated redemption risk management, with their regulatory logic becoming closer to a macro-prudential framework.

In 2026, stablecoins may simultaneously assume the dual roles of payment infrastructure and funding pools, with their regulatory focus potentially no longer limited to a single department but involving the collaboration of central banks, finance, and financial regulatory agencies. The impact of stablecoin reserve structures on government bond demand and the potential shocks of redemption pressures on short-term interest rates may become important topics for policy discussions. From a trend perspective, stablecoins are transitioning from "cryptocurrency market tools" to "macro-financial variables." Once this transformation is confirmed institutionally, the competitive logic of the industry will also change. It will not only be about competing in technology and user scale but also about compliance capabilities, asset management capabilities, and risk tolerance.

4.2 On-chain leverage and clearing risks: Does DeFi have systemic safety?

In recent years, regulatory attention to DeFi has largely focused on compliance boundaries, investor protection, and individual risk events. However, as on-chain lending, perpetual contracts, liquidity staking, and re-staking structures continue to stack, the risk forms of DeFi are no longer limited to a single protocol but are gradually exhibiting cross-protocol and cross-asset interconnected characteristics. Entering 2026, whether on-chain leverage structures will be included in the regulatory view of systemic risks is worth our attention. Currently, there is no unified legal framework for DeFi leverage and clearing mechanisms globally, nor are there clear capital adequacy or leverage limit rules. However, international institutions, including the Financial Stability Board (FSB), have begun to assess whether DeFi poses comparable risks to the traditional financial system in terms of functionality, and the focus of regulatory discussions is shifting to how to identify the structural vulnerabilities of DeFi.

On-chain clearing mechanisms are often considered to have advantages of transparency and automatic execution, but transparency does not equate to stability. In extreme market conditions, oracle price delays, network congestion, and competition among clearing bots can amplify price fluctuations and exacerbate selling pressure. When re-staking and multi-layered leverage are stacked, asset price declines can quickly transmit across different protocols, blurring risk boundaries. Although this process is algorithmic, its economic consequences are not fundamentally different from chain reactions in traditional finance. Unlike traditional finance, DeFi lacks central counterparties and clear liquidity support arrangements. Traditional markets often rely on central bank tools or market stabilization mechanisms in stressed scenarios, while on-chain systems rely more on market-based clearing and arbitrage forces to complete risk clearance. As the scale expands, regulators may begin to focus on a more macro question: if on-chain leverage is concentrated and liquidated in a short time, will its impact spill over into the stablecoin market, exchange liquidity, or even affect the demand for short-term dollar assets?

From a practical progress perspective, it is unlikely that 2026 will immediately introduce explicit limit rules for DeFi leverage, but regulatory orientations may undergo more detailed changes. Regulatory agencies are likely to start with foundational work, enhancing data collection and risk monitoring, and gradually establishing a continuous assessment framework for the scale of on-chain leverage, collateral asset structures, and clearing concentration. On this basis, key infrastructures closely related to DeFi operations, such as oracle services, cross-chain bridges, and front-end interfaces, may also have their legal responsibilities and compliance boundaries further clarified. At the same time, given that DeFi inherently has cross-border characteristics, regulatory cooperation and information-sharing mechanisms between jurisdictions are expected to become increasingly important to reduce regulatory arbitrage space and enhance overall risk identification capabilities. DeFi is not immediately subjected to strict prudential regulation but is gradually entering the periphery of macro-financial discussions. Its design logic may thus change: from purely pursuing capital efficiency and yield maximization to emphasizing risk isolation, liquidity buffers, and structural transparency. If in previous years the regulatory focus was on the compliance of DeFi, in 2026, it is more worth observing whether it begins to be viewed as a potential financial infrastructure. Once this positioning gradually takes shape, the institutional environment and competitive landscape of DeFi will be reshaped accordingly.

4.3 PayFi and cross-border payments: Regulatory focus on on-chain payment paths

In 2026, alongside stablecoins, it is also worth paying attention to whether on-chain payments based on stablecoins will be formally incorporated into the cross-border payment regulatory framework. As stablecoins, compliant wallets, and deposit and withdrawal channels combine, on-chain transfers have begun to serve real trade settlements and cross-border remittances. Once the scale expands, it will no longer be just a technical innovation but may become a payment path outside the traditional banking system. Currently, there is no independent legal category specifically targeting "PayFi," but relevant regulations already exist. The U.S. includes stablecoin issuers under currency transmission and anti-money laundering regulations; the EU regulates electronic money-type tokens under the MiCA framework; and regions like Singapore and Japan also incorporate stablecoins into their payment law systems. At the same time, the FATF's "travel rule" requires virtual asset service providers to retain identity information in cross-border transfers. These rules collectively form the foundational regulatory framework for on-chain cross-border payments.

Entering 2026, the regulatory focus may center on "whether it affects cross-border capital order." Core questions include: whether capital flows are traceable, whether they bypass the banking system to form parallel channels, and whether they have substantive impacts on foreign exchange management or capital flows. Especially in some emerging markets, stablecoins have already been used as tools for cross-border settlement or value storage, which may prompt regulators to re-examine their domestic foreign exchange and payment management mechanisms. Therefore, the more likely trend is not a comprehensive tightening or loosening but rather incorporating PayFi into the existing cross-border payment regulatory system. The identity verification obligations for wallets may be strengthened, the licensing requirements for deposit and withdrawal channels may become clearer, and cross-border data reporting may become more standardized. When stablecoin issuers, wallets, and fiat channels form a closed loop, "who bears compliance responsibility" will become a key issue. From a trend perspective, PayFi is transitioning from a payment application to a new variable in the cross-border payment structure. It is unlikely that there will be disruptive policy changes in 2026, but regulatory attention to its macro impact is clearly rising.

4.4 Keywords for 2026: Non-price risks, systemic importance, cross-market transmission

Overall, the policy logic for 2026 can be summarized as a shift in three directions.

(1) From price volatility to structural stability. The real risk is no longer short-term rises and falls but whether liquidity mismatches, excessive leverage stacking, or the risk of stablecoin runs exist. Price is merely a surface issue; structure is the root cause.

(2) Recognition of systemic importance. When certain stablecoins or derivative protocols reach a sufficient scale, they may be viewed as financial infrastructures with systemic influence. Once incorporated into this framework, reporting obligations, capital requirements, and stress testing will be strengthened. Leading platforms will gradually enter a "quasi-banking" phase, while smaller protocols may face higher compliance thresholds, and market concentration will increase.

(3) Cross-market transmission. The connections between the cryptocurrency market and traditional finance are deepening, with stablecoin reserves affecting government bond demand, ETF capital flows linking the two markets, and on-chain clearing fluctuations potentially feeding back into a broader liquidity environment. When these transmission paths become clear, crypto assets will no longer be marginal but will be part of the financial system.

The core change in the policy logic of 2026 is shifting from "whether to allow existence" to "how to incorporate into order." Stablecoins will be financialized, DeFi will be structured, and on-chain payments will be institutionalized. Price remains important, but what will determine market patterns is how risks are defined and managed.

5. How policy reshapes the structure of the cryptocurrency market

In the previous sections, we discussed the direction of policy itself; in this section, we will focus on how policy, in turn, changes the way the market operates. Regulation does not directly determine prices but profoundly influences product design, funding flows, and risk allocation. As compliance boundaries gradually clarify, the competitive logic of the market also shifts. In the past, the cryptocurrency market competed on innovation speed and capital efficiency; as the policy framework gradually takes shape, the focus of competition is shifting to structural robustness and risk controllability. The year 2026 may become a stage for further deepening this structural turning point.

5.1 Changes in product forms: From high-leverage speculation to risk isolation design

The products that attracted liquidity in the early cryptocurrency market often had three characteristics: high leverage, high returns, and low entry barriers. Perpetual contracts, circular lending, and re-staking yield strategies all pursued maximum capital efficiency. In periods of ample liquidity and rising prices, such structures could rapidly amplify profits; however, in extreme market conditions, they also magnified clearing pressures and chain reactions. The problem is not leverage itself but unclear boundaries of responsibility. When product designs lack clear risk-bearing entities or rely heavily on market competition rather than risk buffers for clearing, once severe fluctuations occur, losses are often borne by the weakest link. This structure naturally lacks sustainability from a regulatory perspective because it is difficult to fit into an assessable, manageable framework. As policies gradually clarify, the market is evolving in another direction: modularization and risk isolation. Modularization refers to breaking down functions such as trading, custody, clearing, and yield generation so that risks can be clearly identified; risk isolation aims to prevent the pressures of a single asset or protocol from rapidly transmitting throughout the entire system. For example, stricter collateral rate designs, independent clearing pool arrangements, and separation of assets and operational entities all fall under this thinking. This change may lead to a decrease in the explosive potential of products but an increase in structural stability. Future mainstream product forms may no longer attract users with extreme returns but will emphasize transparency, auditing mechanisms, and stress testing capabilities. The clearer the regulation, the more the market will tend to choose designs that can sustain long-term existence rather than short-term arbitrage tools.

5.2 Changes in funding paths: From anonymous liquidity to identifiable liquidity

One of the most direct impacts of policy on the market is changing how funds enter. The early market heavily relied on anonymous liquidity, with users participating in lending or trading directly through self-custodied wallets, leading to relatively dispersed sources and destinations of funds. This open structure improved efficiency but left room for regulatory arbitrage. As anti-money laundering rules, travel rules, and stablecoin regulatory frameworks gradually take shape, funding paths are starting to become clearer. Exchanges, wallet service providers, and deposit and withdrawal channels bear more compliance responsibilities, and institutional funds are more inclined to enter the market through custody and auditing processes. Liquidity thus appears layered: some maintain their on-chain native forms, while others carry clear identities and compliance attributes. This layering will, in turn, affect project architectures. An increasing number of protocols are separating front-end and underlying contracts, introducing compliance controls at the access layer while maintaining the openness of on-chain logic. Some protocols establish independent pools or licensed liquidity modules to attract specific types of funds. The market structure is also showing a trend towards multilayering. The main chain resembles a value settlement and security layer, while second-layer networks or dedicated chains carry high-frequency application scenarios. Regulators typically focus on fiat interfaces and key infrastructure nodes rather than every on-chain transaction. Therefore, projects often concentrate compliance pressures at entry and exit points while retaining innovative functions within on-chain modules. Funds have not decreased but have become more structured. Future competition will not only be about capturing liquidity scale but also about how to effectively integrate funds across different compliance levels.

5.3 Changes in risk structure: Who bears the tail risk

Policy has also changed the way risks are borne. The risks in the early cryptocurrency market exhibited spillover characteristics, with clearing mechanisms relying on automatic execution and market competition, leading to rapid transmission of losses during extreme fluctuations, primarily borne by leveraged users or liquidity providers. Projects themselves rarely set up formal risk buffer arrangements. As regulation begins to emphasize reserve transparency, asset matching, and clearing stability, protocol designs are gradually adjusting. More and more projects are introducing risk reserves, insurance funds, or layered clearing mechanisms, increasing collateral rates and limiting extreme leverage to reduce systemic shocks. This shift means that risks are beginning to be internalized. Under a backdrop of clearer legal responsibilities, issuers and platforms need to consider long-term sustainability rather than merely pursuing scale expansion. Tail risks are no longer entirely left for the market to spontaneously digest but are pre-allocated and absorbed through structural design. Risks will not disappear but will become more visible, measurable, and priceable. Participants will have a clearer understanding of the risk boundaries they bear, and the market structure will thus gradually shift from a highly expansionary form to a more resilient one.

6. Outlook and Trends: From "compliance adaptation" to "structural choice"

As regulation transitions from uncertainty to executability, the core question of the market has fundamentally changed: it is no longer about how to evade regulation but under what structure to participate in regulation. For project parties, exchanges, and institutions, after 2026, it will be necessary to identify which structures have long-term sustainability and whether they are on the regulatory-allowed track. The role of regulation is shifting from a "short-term sentiment variable" to a "long-term structural variable." It no longer merely influences market volatility but is beginning to systematically reshape the business models, funding sources, and competitive landscapes of different tracks. The differentiation in the market increasingly depends on whether it can be embedded within the regulatory system.

6.1 Compliance is no longer a cost item but a market access right

In past cycles, compliance was often viewed as a passive cost, an added constraint that had to be attached after business maturity. However, from the policy evolution of 2025 to 2026, compliance is moving forward as an institutional screening mechanism, with its core role no longer being to limit but to determine who can enter the market. Whether it is the U.S. legislative exploration around market structure, the landing of the EU MiCA, or Hong Kong's licensing system for stablecoins and trading platforms, they fundamentally answer the question of "who can participate in the market" in advance. The direct result of this is that the market is gradually forming a layered structure: some entities enter a strong regulatory system, gaining institutional funds and compliant liquidity; others remain in gray or unlicensed innovation spaces, continuing to bear higher uncertainties. Over time, the funds and users between the two will show increasingly obvious segregation. This change is already beginning to manifest in specific tracks. Exchanges are no longer merely matching platforms but are gradually evolving into compliant financial entry points, with licensing capabilities becoming core barriers; project parties need to consider compliance paths for issuance and liquidity early on, or they will struggle to access larger-scale funds; institutional funds will prioritize flowing into assets and structures with clear regulatory identities. Compliance determines "whether one has the qualification to participate."

6.2 The market will move towards a "dual-track system": compliant financial layer vs on-chain innovation layer

From the practices of major regulatory jurisdictions globally, the cryptocurrency market is unlikely to be uniformly incorporated into a single system but is more likely to maintain a "dual-track operation" structure in the long term. One side is the compliant financial layer centered on stablecoins, ETFs, licensed exchanges, and custodians, emphasizing transparency, responsibility boundaries, and risk control, primarily accommodating institutional funds and large-scale asset allocations; the other side is the native innovation layer represented by DeFi and on-chain protocols, characterized by openness, experimentation, and high-risk capacity. These two tracks will not be completely severed but will form limited connections through stablecoins, deposit and withdrawal channels, and various compliance interfaces. Under this structure, the core capability of the industry is no longer merely single-point product innovation but how to establish connections between the two systems, bringing off-chain funds onto the chain while transforming on-chain assets into financial products acceptable to the regulatory system. This makes DeFi no longer a completely independent financial system but gradually evolves into the execution and innovation layer on-chain; centralized exchanges and custodians become key hubs connecting the two tracks; and cross-chain, bridging, and settlement infrastructures transition from technical tools to key nodes with financial attributes. Future competition will largely revolve around "who can become the connector."

6.3 Stablecoins will become the core entry point of "new financial infrastructure"

Stablecoins are undergoing a leap from tools to infrastructure. Starting in 2026, the most critical question regarding stablecoins from the outside will be the qualifications of issuing entities and their credit tier within the financial system. From the current regulatory practices around the world, the issuance rights of stablecoins are clearly concentrating towards banks and high-credit institutions. Stablecoins are no longer merely liquidity tools within the cryptocurrency market but are beginning to embed themselves into a broader financial system, becoming key interfaces connecting on-chain and off-chain. Their functions are also expanding, transitioning from initial trading mediums to payments, clearing, collateral, and even RWA settlements, exhibiting characteristics of a "financial operating system." The stablecoin track itself will shift from relying on liquidity scale to relying on credit endorsement and regulatory qualifications, significantly enhancing the concentration effect of leading players; the payment track may revolve around stablecoins, becoming the most practical application scenario; the development of RWAs will also heavily depend on stablecoins as clearing and liquidity carriers. The status of exchanges as entry points may be somewhat weakened, as the stablecoin network itself has the potential to become a new user entry point.

6.4 Regulation will shift from "rule-making" to "data-driven"

As the institutional framework gradually takes shape, the focus of regulation is shifting from rule-making to continuous monitoring and dynamic intervention. The future regulatory system will resemble a real-time operating system, relying on data rather than static rule texts. The transparency of on-chain data enables regulators to continuously track key risk indicators in the market, such as stablecoin scale, leverage levels, or clearing concentration. In this context, regulation will no longer rely on "one-size-fits-all" restrictive measures but is more likely to intervene in specific structures through targeted constraints and window guidance. This approach enhances regulatory efficiency while also shifting market uncertainties; it is no longer uncertain whether one will be regulated but rather uncertain when and in what manner one will be precisely intervened. The importance of on-chain data and risk control capabilities will significantly increase, and related infrastructures will upgrade from auxiliary tools to part of the regulatory collaboration layer. DeFi protocols will also need to consider transparency and risk control more proactively in their designs, while high leverage and complex derivatives may become重点监管对象, facing a contraction of their innovation space.

6.5 Pattern evolution: From "open competition" to "structural concentration"

From a longer-term perspective, the ultimate impact of regulation is not to suppress the market but to reshape market concentration. Due to the clear scale effects of compliance, large institutions find it easier to bear costs, gain trust, and establish stable interactions with regulators, leading to a gradual concentration of resources among a few entities. In this process, key links such as exchanges, stablecoin issuers, and custodians are already beginning to show a trend towards becoming dominant. The future market structure is likely to evolve into one where a few core compliant infrastructures dominate, with numerous innovative projects revolving around them, while entities in an intermediate state, neither fully decentralized nor compliant, will face ongoing pressure. This change may also transmit to public chains and related ecological layers; ecosystems lacking core liquidity entry points or compliance access capabilities may gradually become marginalized, while infrastructures capable of accommodating mainstream funds will form stronger network effects.

6.6 The compliance path of DeFi: From "protocol neutrality" to "interface compliance"

Recent weakening of enforcement against DeFi reflects a subtle shift in regulatory strategy: rather than directly constraining underlying protocols, a more realistic path is to intervene at the interface level. Thus, a gradually clearer direction is forming: protocols themselves remain neutral, but the entry and connection layers they rely on are brought under regulation. From a practical enforcement perspective, regulators may focus on front-end (Web UI), development teams or operational entities, liquidity entry points (such as fiat deposits and withdrawals, stablecoins), and assets connected to the real world (RWAs). In the future, DeFi is likely to evolve into a "layered compliance structure": the underlying protocols maintain openness and decentralization, while user access paths, funding entry points, and asset mapping parts gradually embed mechanisms such as KYC/AML, whitelist requirements, or geographic restrictions.

This evolution will directly change the development logic of DeFi. The past growth model centered on TVL may gradually give way to "fund quality and compliance access capabilities." Protocols that purely rely on a permissionless narrative will see their space compressed, leaning more towards experimentation and long-tail innovation; if projects wish to accommodate larger-scale funds, they must proactively introduce compliance interfaces at certain levels. DeFi structures that can connect with compliant funds, especially those combined with RWAs, are expected to become a new mainstream direction; for example, introducing whitelist pools, compliant stablecoin settlements, or on-chain financial structures in collaboration with licensed institutions. This is essentially reshaping the positioning of DeFi: it is no longer just an alternative system to traditional finance but may become the on-chain execution layer of the regulated financial system. The real competition will shift from "whether it is decentralized" to "how to embed regulatory requirements without undermining core efficiency."

6.7 Track repricing: From "traffic competition" to "structural competition"

As regulation becomes a structural variable, the market's valuation logic is also changing. The core factors driving project valuations in the past were largely concentrated on user scale, trading volume, and TVL metrics, while the importance of these factors will relatively decline in the future, replaced by compliance capabilities, funding attributes, and the ability to access regulatory systems. This change will lead to significant differentiation across different tracks. DeFi will split into "compliant structures" that accommodate institutional funds and "permissionless structures" that bear innovative experiments; RWAs, due to their inherent compliance interface attributes, are expected to become the most direct beneficiaries; the stablecoin track will further strengthen head concentration, driven by credit and licensing competition; exchanges will gradually evolve into comprehensive financial platforms; and on-chain data and risk control infrastructures will become hidden but critical support layers. The core of market competition is shifting from "whose product is better" to "who is in a more favorable structure."

For industry participants, the regulatory era does not mean increased certainty but rather a change in the sources of uncertainty. Prices remain unpredictable, but structures are becoming predictable. Funds will flow into safer, more transparent systems; risks will be compressed into more controllable ranges; and power will concentrate among entities with compliance capabilities. The real watershed is not whether a particular bill passes but whether the structure you are in is on a long-term track allowed by regulation.

7. Conclusion: A new phase of the cryptocurrency market under the institutional environment

As the regulatory framework gradually clarifies, the cryptocurrency market is undergoing a deep structural reshaping. Policies do not determine price trends but are changing how products are designed, how funds enter, and how risks are allocated. The competitive logic of the market is thus shifting from efficiency-first to structure-first.

The previous rapid growth was built on high leverage, nested yields, and risk spillovers. Against the backdrop of regulators continuously strengthening the transparency of stablecoin reserves, the robustness of clearing mechanisms, and the traceability of cross-border capital, such highly stacked structures with ambiguous responsibility boundaries will become increasingly difficult to sustain. In contrast, designs with clear reserves, risk isolation, and defined clearing paths will find it easier to gain long-term funding and institutional space.

This transformation does not mean the end of innovation but rather a change in the direction of innovation. The rising costs of compliance, operational costs, and capital occupation have raised industry thresholds but have also prompted the market to shift from disorderly expansion to steady growth. Risks will not disappear but will become more transparent, measurable, and pre-allocated within structures rather than being passively exposed during crises.

The form of cryptocurrency is being institutionalized. The phase of barbaric growth is retreating, and a phase of stable expansion is gradually unfolding. Policies are not the ceiling of the market but a filter for growth paths. Projects that can find a balance between transparency and efficiency are more likely to navigate cycles and become the core structure of the next phase.

References

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