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

The United States is in a tricky spot regarding its 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. New Zealand, which is moving forward with a structured framework that could establish them as a hub for crypto businesses, could provide the US with a useful template to follow.

The US Struggling to Find a Middle Ground

New York City is a major financial center, so others tend to follow its lead, which is a problem as they enforce some of the strictest 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 decentralized finance (DeFi) projects are still hesitant to enter 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, limiting American users’ access to crypto services.

The US has the potential to become a global leader in crypto regulation, but major policy shifts are needed to make that possible.

How the US Compares to Other Markets

The US lags behind regulatory leaders like Switzerland and Singapore, who are further ahead in establishing crypto-friendly environments.

With a well-defined legal framework and regulatory climates that support crypto businesses, it’s no surprise that both countries effortlessly attract blockchain enterprises. The Swiss have a clear set of guidelines that help businesses know where they stand, while the European Union’s Markets in Crypto-Assets (MiCA) framework provides a standard approach across member states, reducing compliance costs and fostering business growth.

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, improving transparency and addressing challenges associated with decentralized transactions.

New Zealand’s regulation in digital finance is not just limited to crypto investments – the betting industry is also evolving. 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, 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. One major challenge with the current framework in the US is how digital assets are classified.

Without a definitive framework, it’s easy to see why crypto businesses, projects, and investors are reluctant to operate in the US. The US can accomplish a lot by clarifying its regulations and introducing a transparent set of rules.

That would help reduce compliance costs, encourage institutional investment, and streamline the process of integrating tokenized assets into the economy.

While regulation is important, the US also needs to strike a balance. Establishing oversight is necessary to protect investors and maintain market stability, but excessive regulation could stifle growth and drive businesses away.

The US can take inspiration from traditional financial markets and implement structured oversight, which would help to legitimize the industry and make it more attractive for foreign investment.

The US also needs to ensure that crypto businesses have access to banking services. Financial institutions remain skeptical about digital assets due to regulatory uncertainty and compliance concerns.

However, the US can bridge the gap between traditional finance and digital assets by implementing initiatives that enable banks to collaborate with crypto enterprises.