European Union states on Tuesday (May 16) gave the final nod to the world's first comprehensive set of rules to regulate cryptoassets on Tuesday, piling pressure on countries such as Britain and the United States to play catch up.
An EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April.
Regulating crypto has become more urgent for regulators after the collapse of crypto exchange FTX.
"Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism," said Elisabeth Svantesson, finance minister for Sweden, which holds the EU presidency.
The rules require firms that want to issue, trade and safeguard cryptoassets, tokenised assets and stablecoins in the 27-country bloc to obtain a licence.
Crypto firms say they want certainty in regulation, putting pressure on countries to copy the EU rules, and on regulators to come up with global norms for a cross-border activity.
Britain has outlined a phased approach, starting with stablecoins and broadening out to unbacked cryptoassets later on, but there is no firm timetable.
The United States has focused on using existing securities rules for enforcement action in the sector while it decides on whether to introduce bespoke new rules and who would apply them.
Hester Peirce, one of the commissioners at the US derivatives regulator CFTC, said last week that a number of federal and state authorities are trying to figure out what oversight role they could play in the crypto sector.
"We are wandering the in the desert a bit," Peirce told a conference.