Legal Framework for Cryptocurrency and Digital Assets: A Comparative International Perspective
Abstract
The emergence of cryptocurrencies and digital assets has significantly transformed the global financial system by introducing decentralized technologies that facilitate secure, transparent, and borderless transactions. Cryptocurrencies such as Bitcoin, Ethereum, and various stablecoins, together with tokenized digital assets, decentralized finance (DeFi), and blockchain-based financial services, have created new opportunities for investment, innovation, and international commerce. At the same time, these technologies present substantial legal and regulatory challenges relating to financial stability, consumer protection, taxation, anti-money laundering (AML), counter-terrorism financing (CTF), cybersecurity, market integrity, and investor protection. Countries across the world have adopted diverse regulatory approaches, ranging from comprehensive legal recognition and licensing frameworks to restrictive policies or complete prohibitions, reflecting differences in economic priorities, legal traditions, and financial governance models. This study examines the legal framework governing cryptocurrencies and digital assets through a comparative analysis of regulatory approaches adopted in major jurisdictions, including the United States, the European Union, India, the United Kingdom, Singapore, and Japan. It analyzes issues relating to the legal classification of digital assets, cryptocurrency exchanges, taxation, financial regulation, anti-money laundering compliance, central bank digital currencies (CBDCs), and cross-border transactions. The study further explores international initiatives aimed at harmonizing cryptocurrency regulation while balancing technological innovation, financial inclusion, consumer protection, and market stability. It concludes that effective regulation requires adaptive legal frameworks, international cooperation, technological innovation, and robust regulatory oversight to ensure the responsible growth of digital asset markets within the evolving global digital economy.