Why Digital Asset Regulation May Be Entering Its Second Era

According to Yuliya Barabash, founder and managing partner at SBSB Fintech Lawyers, the digital asset industry, after years of demanding clarity, now has the beginnings of it. Barabash, who advises financial technology firms through the global licensing process, argues that regulatory clarity and cost move in the same direction: as digital assets become part of mainstream finance, they will be expected to behave like mainstream finance, and traditional financial regulation has never been cheap.

Barabash frames the sector's development as two eras. The first focused on drawing virtual assets inside the regulatory perimeter; the second concerns deciding what regulated digital finance looks like and where it will be built. She argues the traditional divide between digital and conventional finance is becoming untenable, citing banks adopting custody solutions, traditional institutions moving into digital assets, and securities, bonds and real estate increasingly appearing on-chain. Two areas are highlighted as most visible: stablecoins as payment rails and the tokenization of real-world assets.

On stablecoins, Barabash notes the U.S. GENIUS Act subjects payment stablecoins to stringent reserve backing, audits and federal oversight. She cites the Japanese Financial Services Agency, which stated that stablecoin issuers must obtain registration or authorization, including as a Funds Transfer Service Provider, trust company or trust bank. On tokenization, she writes that wrapping a corporate bond, fund unit or commercial property on a blockchain changes the transaction technology but not the nature of the underlying asset. She cites forecasts projecting the tokenized RWA market could reach $16 trillion by 2030.

Barabash argues that the largest firms are signalling where regulatory capital is going. Coinbase, OKX, Kraken and Bybit have built regulated operations across Europe, while Binance and Coinbase have established regulated presences in the United Arab Emirates. In her view, these firms select jurisdictions based on banking access, payment infrastructure, institutional clients, talent pools, custody and capital markets rather than license fees. She says requests for the fastest and cheapest fintech license typically come from early-stage startups, while established businesses focus on banking, payments, custody and whether a jurisdiction will remain suitable as they grow.

Barabash anticipates regulators will provide greater transparency over the next few years, but not lower costs. She envisions four regulatory archetypes shaping the next phase: a harmonized single market, exemplified by the EU's Markets in Crypto-Assets (MiCA) regulation; capital market integration focused on stablecoins and tokenization; dedicated strategic hubs such as Dubai's Virtual Assets Regulatory Authority (VARA); and controlled systemic absorption into established international banking systems. She concludes that a cheap, expedited offshore license may secure a temporary launchpad but cannot sustain a viable long-term enterprise.