report<\/a> from the Financial Stability Board showing that there\u2019s growing regulatory divergence around stablecoins and crypto across jurisdictions. What does that divergence actually mean, and who\u2019s benefiting from it?<\/strong><\/p>\nWojciech Kaszycki: If you look at what\u2019s happened over the last year or so, it\u2019s clear we\u2019re seeing a global realignment. Take Qatar, for example. It had to navigate tensions with the U.S. and European governments, yet today it\u2019s home to the most profitable company in the world. At the same time, we\u2019ve seen the U.S. implement the GENIUS Act, and most people aren\u2019t even aware that a significant portion of Visa transactions are now settled in USDC. That would\u2019ve been unthinkable 18 months ago.<\/p>\n
In Europe, you have the Markets in Crypto-Assets (MiCA) regulation, which essentially bans the use of stablecoins like Tether by exchanges and wallets. They\u2019re not allowed as a payment method anymore. Meanwhile, other stablecoins are being approved, many of them directly tokenizing fiat currencies.<\/p>\n
So we\u2019re seeing a complete shift. Companies that were previously locked out of financial systems have become multi-unicorns. A whole new market has emerged. This isn\u2019t about speculation \u2014 it\u2019s a broader trend. In the U.S., the GENIUS Act is about making the U.S. dollar more dominant globally by enabling tokenized forms to move more freely across jurisdictions, leveraging blockchain rails. Europe seems to be doing the opposite. In my view, the EU completely misread the intention behind the GENIUS Act.<\/p>\n
What\u2019s fascinating is how roles have reversed. A few years ago, Europe was seen as more open to blockchain and stablecoin innovation. The U.S. was restrictive. Today, it\u2019s flipped.<\/p>\n
CN: Why do you think Europe used to be ahead?<\/strong><\/p>\nWK: It goes back to the previous SEC chair in the U.S. There was a lot of scrutiny. Projects were getting blocked, and there was speculation that stablecoins might be made illegal, as only banks could issue what were considered \u201cmeans of payment.\u201d Europe, on the other hand, operated in a more unregulated space, which gave commercial freedom to innovators.<\/p>\n
That changed when the U.S. pivoted. Now, if the EU had implemented their frameworks in a more effective way, they could\u2019ve stayed ahead. But that didn\u2019t happen.<\/p>\n
In the U.S., there\u2019s one regulator \u2014 the SEC. In Europe, every country has its own version of the SEC. So while MiCA says \u201chere\u2019s the framework,\u201d each country has to implement its own law to operationalize it. In Poland, that interpretation is over 300 pages. In Malta or Cyprus, it might be just 11. That\u2019s a huge problem.<\/p>\n
Guest: Exactly. Europe overregulates. And now, with Trump back in office, deregulation is gaining traction in the U.S. There was once a simple legal principle: \u201cIf something is not forbidden, it\u2019s allowed.\u201d That helped drive innovation. Bureaucrats reversed that. Now it\u2019s more like: \u201cIf something is not explicitly allowed, it\u2019s forbidden.\u201d That stifles new ideas.<\/p>\n
CN: This is interesting. Why would Europe not lean into decentralization to counter the dominance of U.S.-based Web2 giants?<\/strong><\/p>\nWK: That would have made sense, and many of us expected that. But the reality is different. Smaller EU countries \u2014 Estonia, Latvia, Lithuania, Cyprus, Malta \u2014 have done relatively better with regulation because they\u2019re small enough to adapt quickly and enforce policy more easily.<\/p>\n
But here\u2019s the issue: EU law overrides national law. So every country ends up with additional layers of regulation on top of EU frameworks to make sure they\u2019re compliant. That means every member state ends up with stricter regulations than the base directive. And the smaller countries can adapt more easily to this complexity than larger ones. <\/p>\n
<\/p>\n
CN: Are there any examples of how that fragmentation plays out?<\/strong><\/p>\nWK: Sure. Look at the Electronic Money Institutions (EMIs) in Lithuania. A few years ago, you could buy an EMI license for around \u20ac100,000, get a lawyer, and have it up and running in 3\u20136 months. These institutions could do nearly everything a bank could \u2014 except take deposits or offer credit.<\/p>\n
Now it\u2019s harder to get an EMI license than to start a bank. Why? Because there were some bad actors, and regulators responded by clamping down. Even though the damage caused by EMIs was minimal compared to scandals in traditional finance, like the Danske Bank case, crypto is an easier target.<\/p>\n
In Poland, proposed legislation would impose twice the penalty for operating an unlicensed crypto exchange compared to an unlicensed bank. That says everything about the regulatory mindset here.<\/p>\n
CN: What should change in terms of regulation? Are there elements of the current framework that are useful or worth keeping?<\/strong><\/p>\nWK: We should have a two-speed system: one for large entities like Binance or Kraken that operate at an institutional scale, and another for startups and smaller innovators.<\/p>\n
Major exchanges should be regulated just like traditional financial institutions \u2014 same oversight, same expectations. But innovators need room to experiment. We should have something similar to regulatory sandboxes or small payment institution licenses, with limited compliance obligations and clear operational boundaries. <\/p>\n
Otherwise, you\u2019re not killing innovation \u2014 you\u2019re just driving it somewhere else. People will go to Dubai, Singapore, and Costa Rica \u2014 places where the laws are more accommodating.<\/p>\n
Another big problem is who is doing the regulation. The SEC\u2019s mission is market safety \u2014 not innovation. Their job is to ensure financial markets function safely and predictably. That\u2019s fine, but it doesn\u2019t support the kind of risk-taking that fuels technological breakthroughs.<\/p>\n
Instead, we need dual-track governance: one regulator focused on innovation and experimentation, and another focused on safety and oversight. They should work together \u2014 so when something innovative reaches the scale or scope of financial markets, it transitions into the purview of traditional regulators in a safe, supervised way. That\u2019s how real, sustainable innovation happens.<\/p>\n
CN: Are EU regulators open to that kind of dual approach?<\/strong><\/p>\nWK: Not really. Right now, the approach is: \u201cLet\u2019s regulate crypto. Let\u2019s get it under control.\u201d In some countries, MiCA licensing has been made deliberately difficult \u2014 not to encourage compliance, but to limit participation. Some regulators want only three or four large, easily controlled players. That\u2019s how you kill innovation in Europe.<\/p>\n
It\u2019s not that MiCA is entirely bad. There are positives \u2014 for example, it clearly defines what stablecoins are, and it acknowledges tokenized e-money. But again, the issue isn\u2019t the law itself \u2014 it\u2019s how it\u2019s implemented. We approach regulation with suspicion, assuming the worst. So we impose extreme penalties and overly strict interpretations, and that undermines the potential.<\/p>\n
Let\u2019s shift to DeFi. Where do you think we are globally and in the EU in terms of regulating decentralized finance?<\/strong><\/p>\nWK: To be honest, we\u2019re nowhere. Regulators are treating DeFi purely as financial activity, instead of starting with the underlying technology \u2014 blockchain. That\u2019s the wrong approach.<\/p>\n
Let\u2019s say someone builds a lending protocol that works just like Aave but isn\u2019t decentralized. It\u2019s just a centralized database with a web UI. That system would fall under existing financial regulations \u2014 derivatives, lending, etc. Everything is already defined.<\/p>\n
But DeFi is different. It\u2019s a technological model first, and a financial model second. We should treat it that way. If we started with the tech layer \u2014 how blockchains operate, how data is stored, how smart contracts interact \u2014 we could build a far better regulatory model that reflects how these systems actually function.<\/p>\n
Today, DeFi projects set up foundations overseas just to avoid the \u201cwho\u2019s responsible\u201d question. That\u2019s not healthy. We need clear, transparent ways to launch and operate DeFi protocols legally and safely, without killing innovation.<\/p>\n
CN: Are there legal tools already in place that could be adapted?<\/strong><\/p>\nWK: Definitely. For example, in the EU, we already have crowdfunding licenses. You can receive a license for a crowdfunding platform \u2014 and crowdfunding is essentially one part of DeFi. Debt financing, yield products, tokenized equity \u2014 it all overlaps.<\/p>\n
The legal pieces exist. They just need to be linked together coherently. The danger is that regulators will take the easy route and say, \u201cThis is financial \u2014 let\u2019s give it to the banks.\u201d If that happens, DeFi won\u2019t die \u2014 it\u2019ll just move to other jurisdictions. That\u2019s what always happens.<\/p>\n
Right now, most DeFi protocols are not compliant with things like AMLD5 or AMLD6. That\u2019s a real challenge. But we\u2019ll find a way. The key is having open-minded policymakers, like what we\u2019re starting to see in the U.S. The EU still feels far behind on this front.<\/p>\n
CN: On a different note, Poland\u2019s had strong recent growth. Was that tied at all to crypto or digital asset innovation?<\/strong><\/p>\nWK: No, not really. Most of Poland\u2019s recent economic growth stems from the war in Ukraine. We\u2019ve had a large influx of Ukrainian refugees, which brought labor, consumption, and also logistics related to aid. We\u2019re also a large EU country and benefited from timing and macro trends.<\/p>\n
Unfortunately, this growth has little to do with blockchain or digital assets. Our regulators are still very skeptical. Just recently, the head of our national securities regulator publicly said crypto is essentially a scam \u2014 totally dismissive. It\u2019s an outdated view.<\/p>\n
CN: <\/strong>Is there anything else you feel isn\u2019t being discussed enough?<\/strong><\/p>\nWK: I think we\u2019re missing how digital asset management companies (DACs) are quietly driving mass adoption. Everyone talks about DAOs, but DACs are where institutional money is entering the space.<\/p>\n
Here\u2019s why: Not everyone wants to hold private keys or deal with seed phrases. Many people simply want exposure to digital assets without the friction. That\u2019s what DACs offer \u2014 brokerage-like experiences, custodial solutions, or investment products that feel familiar. That\u2019s a signal of mass adoption.<\/p>\n
And it\u2019s not just retail. Many EU jurisdictions offer tax advantages for investing via certain legal structures \u2014 family foundations, alternative investment schemes, etc. \u2014 but crypto isn\u2019t a recognized asset class in many of these regimes. DACs can bridge that gap. That\u2019s a huge on-ramp. <\/p>\n
<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
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