New Zealand on Course to Leave Trump Red-Faced Over Crypto

The United States are in a tricky spot regarding their approach to cryptocurrency regulation.
Digital assets are becoming increasingly popular, leaving policymakers, industry leaders and investors scratching their heads about how to get a handle on it.

The current landscape is scrappy at best, but president Donald Trump’s administration has a chance to establish more crypto-friendly regulations.

The US risks getting left behind by countries such as New Zealand, which is moving forward with a structured framework that could establish them as a hub for crypto businesses.

The US Struggling to Find a Middle Ground

New York City is major financial centre, so others tend to follow their lead, which is a problem as they enforce some of the most hard-nosed crypto regulations in the US.

In general, state-level restrictions are the bane of crypto businesses. They play a huge part in why the regulatory environment makes it near-impossible for crypto projects to find some respite.
There is a growing enthusiasm around digital assets, with 28 percent of American adults expected to own at least one cryptocurrency in 2025.

However, many decentralised finance (DeFi) projects are still dragging their heels around venturing into the US market, which says a lot about the regulatory landscape there.

Legal uncertainties and compliance burdens have forced several companies to seek solutions elsewhere, which is a huge problem for American users as it limits their access to crypto services.
There is no denying that the US has the potential to become a global leader in crypto regulation, but they need major policy shifts to make that possible.

How the US Compares to Other Markets

The US is a regulatory backwater compared to Switzerland and Singapore who are further ahead in terms of establishing crypto-friendly environments.

With a well-defined legal framework and regulatory climates that support crypto businesses, it is no surprise that both countries effortlessly attract blockchain enterprises.
The Swiss have a clear set of guidelines that helps businesses know where they stand, while the European Unions’ Markets in Crypto-Assets (MiCA) framework has a standard approach across member states. That helps to reduce compliance costs and makes it easier for businesses to thrive.

New Zealand is also making significant strides in becoming a hub for crypto businesses. They recently introduced new regulations for crypto-asset reporting as part of the OECD’s Crypto-Asset Reporting Framework (CARF).
If enacted, the new rules will require crypto-asset service providers to collect and report transaction data, which will improve transparency and address challenges associated with decentralised transactions.

It is a move that aligns with international efforts to standardise crypto regulations and make them foolproof.
New Zealand’s regulation in digital finance is not just limited to crypto investments – the betting industry is also being impacted by an evolving regulatory landscape.

Many of the best sports betting apps in NZ are operated by companies based in other jurisdictions, but changes to gambling regulations will provide the Kiwi government with greater control.
With many sportsbook operators allowing players to fund their accounts with crypto, the regulatory developments in each sector will undoubtedly impact the other.

The US Needs Clarity in its Crypto Regulations

There needs to be clear regulations for the crypto industry to flourish, and one major challenge about the current framework in the US is how they classify digital assets.
Without a definitive framework, it makes sense why crypto businesses, projects and investors are reluctant to ply their trade in the US. The US can accomplish a lot by just clearing up the framework and introducing a transparent set of rules.

That would go a long way in reducing compliance costs, encouraging institutional investment and streamlining the process of integrating tokenised assets into the economy.

While regulation is important, the US also needs to know when to reign it in. Establishing oversight is certainly imperative to protect investors and make sure the market is stable enough to thrive, so implementing too many regulations can slow down growth and drive businesses away.

There has to be a balance that encourages growth and maintains the necessary safeguards. The US can take a page from traditional financial markets and implement structured oversight, which will help to legitimise the industry.

Structured oversight, similar to that seen in traditional financial markets, could help legitimise the industry and make it more attractive for foreign investment.
The US also needs to make sure crypto businesses have access to banking services. Financial institutions are always sceptical about digital assets due to regulatory uncertainty and concerns over compliance.
However, the US can bridge the gap between traditional finance and digital assets by implementing initiatives that pave the way for banks to work hand in hand with crypto enterprises.