The European Union has taken yet another step towards a fully regulated crypto landscape. The European Banking Authority (EBA), the EU’s top banking regulator, has released a pivotal news draft framework that outlines how banks manage their exposure to crypto assets.

This also sets stricter capital requirements for banks holding digital assets. However, the new draft of the EBA – falls under the Capital Requirements Regulation (CRR) – provides a green light of regulation to banks who have been hesitant to enter the crypto market due to uncertainty.

On August 5, 2025, EBA published a Final Regulatory Technical Standard (RTS) that specifies the technical elements needed by agencies to calculate and aggregate exposures of crypto assets in relation to the careful treatment of such exposures.

“RTS addresses implementation aspects and ensures harmonization of capital requirements for the exposure of crypto assets by institutions across the EU,” the EBA said.

The EBA has published new risk guidelines for CryptoAssets. EU authorities have set new rules on how European banks can determine and oversee cryptocurrency accounts based on new capital rules related to Basel and MICA https://t.co/IQ07AeHBIW #FundAdmin #custody pic.twitter.com/vrodt7zryh

– Asset service hours (@astimes_) August 6, 2025

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New guidelines will help you create a single, consistent rule for all financial institutions

“The agency shows an increasing interest in participating in code breaking activities,” the EBA said.

According to the EBA, this interest is driven by the potential for new revenue streams and the need to remain competitive.

“Institutions are exploring a variety of roles, including acting as cryptocurrency managers, issuing cryptocurrency and providing related services such as trading and lending on behalf of clients,” the EBA said.

Banks must implement certain detailed risk models for crypto holdings. The EBA draft calls for a strict model to explain, among other things, credit risk, market risk, and counterparty credit risk.

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ESMA outlines a framework for assessing the capabilities of employees in crypto companies

The European Securities and Markets Agency (ESMA) has released new guidelines for assessing the competency requirements of employees working in crypto companies. Furthermore, the new guidelines are consistent with the EU market under the Crypto Deduction Regulation (MICA).

In February, European Watchdog published a consultation paper. According to the paper, the key objective of the draft guidelines is to ensure the minimum level of knowledge and ability of staff to provide clients with advice and information about crypto assets or crypto assets services.

Importantly, the step is to “enhance investor protection and promote investors’ trust in the crypto assets market.”

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The U.S. Securities and Exchange Commission (SEC) announced new guidelines on April 4, stating that certain fiat-backed stablecoins will be classified as “non-securities,” thereby exempting them from transaction reporting requirements.

The updated classification marks a pivotal moment in the regulatory landscape for digital assets, offering much-needed clarity for stablecoin issuers and market participants.

According to the SEC notice, stablecoins that qualify as “covered stablecoins” must meet strict criteria: they must be fully backed by physical U.S. dollars or low-risk, short-term liquid instruments, and must be redeemable at a 1:1 ratio with the U.S. dollar.

New SEC Rules Exclude Algorithmic and Synthetic Stablecoins from ‘Non-Security’ Status

The new framework explicitly excludes algorithmic stablecoins and synthetic dollar tokens that rely on software mechanisms or trading strategies to maintain their peg.

The guidelines also prohibit covered stablecoin issuers from commingling reserves with operational funds, offering yield or profit-sharing to token holders, or using reserves for market speculation.

These conditions align closely with provisions laid out in recent legislative proposals, including the GENIUS Stablecoin Bill introduced by Senator Bill Hagerty and the Stable Act of 2025 from Representative French Hill.

These laws aim to solidify the U.S. dollar’s status as the world’s dominant reserve currency by encouraging the issuance of fully-backed, transparent stablecoins.

Stablecoin issuers like Tether—currently the world’s largest—have become significant holders of U.S. Treasury bills, with Tether alone now ranking as the seventh-largest holder globally, surpassing nations like Germany and Canada.

U.S. Treasury Secretary Scott Bessent underscored the importance of stablecoin regulation during the White House Digital Asset Summit on March 7, describing it as central to the administration’s strategy for maintaining dollar dominance in the digital age.

SEC Commissioner Crenshaw Pushes Back Against New Stablecoin Guidelines

However, not all reactions have been positive. SEC Commissioner Caroline Crenshaw, known for her critical stance on cryptocurrencies, publicly criticized the new guidelines.

In an April 4 statement, she accused the SEC of misrepresenting the risks of USD-backed stablecoins and claimed the report contained “legal and factual errors.”

Crenshaw highlighted that most stablecoins are only accessible to retail buyers via intermediaries, not directly from issuers—a point she argued the SEC downplayed.

She said over 90% of USD-stablecoins are distributed on secondary markets through crypto trading platforms.

Despite her concerns, the broader crypto industry has welcomed the guidance.

Token Metrics founder Ian Balina described it as a positive development, calling it “a clear step in focusing on what really matters in the crypto space.”

Last month, Federal Reserve Chair Jerome Powell affirmed the central bank’s support for developing a regulatory framework around stablecoins during a Senate hearing.

Powell stated that the Federal Reserve supports the creation of a regulatory framework for stablecoins, noting the importance of protecting consumers and savers.

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