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The impact of cryptocurrency regulations on global markets in 2025

This college-level essay investigates the impact of cryptocurrency regulations on global markets in the year 2025. Written in Harvard citation style, it explores how regulatory frameworks — such as MiCAR in the EU and CFTC oversight in the U.S. — influence market stability, innovation, and consumer protection. The paper analyzes the effects of these regulations on emerging trends like decentralized finance (DeFi) and non-fungible tokens (NFTs), while also discussing challenges such as regulatory inconsistency and the risk of overregulation.

May 4, 2025

* The sample essays are for browsing purposes only and are not to be submitted as original work to avoid issues with plagiarism.

Cryptocurrency Regulations 1

THE IMPACT OF CRYPTOCURRENCY REGULATIONS ON GLOBAL MARKETS IN 2025

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Abstract

Cryptocurrencies in the past are associated with consumer scamming, money laundering, and

financing terrorists. In 2025, governments globally developed regulations to protect consumers

and risks associated with cryptocurrencies. The EU operates with MiCAR as its cryptocurrency

regulation, while the US has adopted CFTC as its system. These regulations have helped deter

market manipulation and ensure transparency in transactions. The regulations have led to the

adoption of new and unique cryptocurrencies that seek financial stability and promote market

trust. They have led to an emergency regarding trends such as decentralized finance (DeFi) and

non-fungible tokens (NFTs). The new cryptocurrencies will improve security and minimize cases

of fraud in the market. However, there are challenges of inconsistency since every bloc or

country is implementing its own regulations. Policymakers in this market should unite efforts to

establish regulations that will build consistency and stabilize cryptocurrency across the world.

Key Words: Cryptocurrency, Global markets, Regulation, Market stability, Consumer protection,

Innovation, Decentralized finance (DeFi)

Cryptocurrency Regulations 3

The Impact of Cryptocurrency Regulations on Global Markets in 2025

Introduction

Cryptocurrency has transformed global finance and the market by providing a

decentralized, transparent, and innovative means through which digital assets are stored or

exchanged. Over the last several years, the cryptocurrency market has grown extensively and

transformed how people view and utilize money (Haralayya et al., 2025, p.767). The expansion

of cryptocurrencies has brought the rise of regulations across the globe. Governments across the

globe in the year 2025 established regulations on cryptocurrency to address the recent trends and

define the future of digital currency. The regulations target anti-money laundering (AML),

consumer protection, and countering the financing of terrorism (CFT) (Nedelkos, 2025, p.1).

This shift will help build trust in the crypto market and minimize associated risks. Therefore, this

paper will analyze the current regulations in cryptocurrency and their impact on global markets

in 2025.

Impact of Regulations

Market stability

Cryptocurrency regulations have led to market stability. The regulations have led to the

establishment of clear rules that oversee cryptocurrency activities (Haralayya et al., 2025, p.767).

This reduces market volatility and increases investors' confidence. For instance, in the US,

lawmakers are revisiting a suit of cryptocurrency bills in 2025 to clarify oversights; that is,

resolving the jurisdiction issues between SEC and CFTC to establish a stable regulatory guide

that could enhance clarity and minimize market instability (PcW, 2025, p.7). However, EU

cryptocurrency regulations such as the "Market in Crypto Assets Regulation" (MiCAR) have led

to uncertainties in the market (PcW, 2025, p.16). MiCAR allows crypto firms to use the national

Cryptocurrency Regulations 4

rules and continue operating before mid-2026. However, some EU countries had already set

stricter regulations with shorter deadlines. This led to regulatory inconsistency in cryptocurrency

operations across the EU bloc. However, firms must fully comply with the MiCAR regulations in

the EU bloc to ensure consistency and market stability by mid-2026 (PcW, 2025, p.16). The

regulations can also help prevent market manipulation since they lead to transparency and

fairness in transactions. Greater stability can lead to greater adoption of cryptocurrencies since

investors feel more secure to participate in a stable market.

Innovation and development

The cryptocurrency regulations have led to innovation and advancement in the field of

digital currency. In 2025, Cryptocurrency news has highlighted advances in technology in this

sector driven by a strict regulatory environment that has balanced flexibility and security (Hapi,

2025, p.1). The regulations have led to the adoption of new and unique cryptocurrencies that

seek financial stability and promote market trust. It led to an emergency regarding trends such as

decentralized finance (DeFi) and non-fungible tokens (NFTs). DeFi offers more accessible and

stable financial services (PcW, 2025, p.15). However, it exposes investors to risks of security and

regulatory compliances. Therefore, regulators have expanded their oversight to decentralized

crypto innovations. Regulators such as "Global Standard Settles and UOSCO" have issued DeFi

policy recommendations on how to implement CFT and AML regulations in DeFi protocols

(PcW, 2025, p.15). The innovation and development in cryptocurrency have led to security and

transparency issues in digital asset transactions. However, the 2025 regulations help mitigate

risks such as cyber threats, fraud, and operation failures as cryptocurrency continues to evolve

and develop.

Cryptocurrency Regulations 5

Consumer protection

The 2025 regulations have also led to consumers’ protection. In the past few years, the

digital currency market has been characterized by common scams and frauds. However,

regulations have helped protect consumers from dishonest practices and online theft. This

regulation ensures that consumers' interests are safeguarded by ensuring their investments are

protected. In 2025 stronger regulators such as anti-money laundering (AML) and transparency

standards were implemented to ensure consumer protection (Kanu, 2025, p.228). These

regulations have helped the government combat illicit financing. Several global governments

have implemented FATF rules that ensure there is efficient sender-recipient information before

transfer (Kanu, 2025, p.228). This has helped the market have efficient information for both

parties to minimize fraud and money laundering. The regulations have also helped ensure

consumer protection by combating the financing of terrorism through cryptocurrencies. They

have helped in the establishment of combating the financing of terrorism (CFT) rules that target

groups that leverage the anonymity of cryptocurrency to fund terrorists (Hapi, 2025, p.1). The

regulations sanction the illicit mixing of services and ensure customer verification during crypto

transparency.

Challenges of the current cryptocurrency regulations

Cryptocurrency regulations lack international harmonization. Different blocs or countries

have different approaches or regulatory rules. This leads to difficulties in trading across the

borders. The lack of common regulations also leads to a lack of global standards, which leads to

inconsistencies and opportunities for regulatory arbitrations (Hapi, 2025, p.1). There are several

regulations set by every government or region that lead to risks of over-regulation.

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Overregulation of cryptocurrencies can discourage innovation and people from exploring new

ideas.

Conclusion

The impact of the cryptocurrency regulations in 2025 will have diverse effects on the

market. Regulations have been set aside to promote investors' trust, ensure consumer protection,

and prevent money laundering and financing of criminal activities. The regulations have also

helped strengthen the market stability and ensure that cryptocurrency is stable. They have also

helped in the development and innovation of cryptocurrency by enabling the development of

DeFi and NFTs. however, regional disparities continue to be a challenge to this market. The risks

of overregulation also continue to impact the market. Therefore, governments around the world

should be careful when implementing regulations to ensure they reduce risks associated with

cryptocurrency regulations while promoting market stability.

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Reference List

Hapi. 2025. The impact of cryptocurrency regulation in 2025: changes, challenges and

opportunities. Hapi. trade.

https://hapi.trade/en/blog/the-impact-of-cryptocurrency-regulation-in-2025

Haralayya, B., Kushnoor, A., & Shetkar, S. 2025. Impact of Cryptocurrency on Global Financial

Stability: Analyze Regulatory Responses and Their Effectiveness in Managing Risks

Associated with Cryptocurrencies. 767–775.

https://doi.org/10.1109/icccit62592.2025.10928168

Kanu, D.H. 2025. Regulation of Cryptocurrency and its Implication for Financial Stability. A

Qualitative Analysis.

https://www.researchgate.net/profile/David-Kanu-4/publication/390971945_Regulation_

of_Cryptocurrency_and_its_Implication_for_Financial_Stability_A_Qualitative_Analysi

s/links/6806311fdf0e3f544f43790d/Regulation-of-Cryptocurrency-and-its-Implication-fo

r-Financial-Stability-A-Qualitative-Analysis.pdf

Nedelkos, C. 2025. Cryptocurrency Regulation: What’s Next for Global Markets? | Caleb &

Brown. Calebandbrown.com.

https://calebandbrown.com/blog/cryptocurrency-regulation-whats-next-for-global-market

PcW. 2025. PwC Global Crypto Regulation Report 2025: Navigating the Global Landscape.

https://legal.pwc.de/content/services/global-crypto-regulation-report/pwc-global-crypto-r

egulation-report-2025.pdf

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May 4, 2025

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Academic level:

Undergraduate 1-2

Type of paper:

Essay

Discipline:

Cryptocurrency

Citation:

Harvard

Pages:

3 (825 words)

Spacing:

Double