August 11, 2026

Recap: TRM Labs Quarterly Policy Roundtable, Q2 2026

TRM Team

Recap: TRM Labs Quarterly Policy Roundtable, Q2 2026

This quarter, TRM's Ari Redbord and Isabella Chase were joined by special guest David Katz (Vice President of Strategy and Public Policy for APAC at Circle), for a review of what mattered most in global crypto policy in Q2 2026.

Read on for highlights from their discussion or watch the full recording below.

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Europe: The UK finalizes its rulebook as MiCA's transitional period ends

The UK’s crypto rulebook

The Financial Conduct Authority (FCA) published its final rules for regulating crypto activity, covering trading platforms, stablecoin issuers, custodians, and intermediaries. The authorization gateway opens on September 30, 2026, with the new regime fully in force by October 25, 2027. Industry reaction has been broadly positive, particularly around the stablecoin provisions, though two questions remain open: where the FCA draws its regulatory perimeter, and how decentralized finance (DeFi) fits within the new regime.

Crypto taxation

The UK also moved on tax this quarter. HM Revenue & Customs (HMRC) published legislation addressing the tax treatment of liquidity pools, staking, and other crypto activities, part of a broader shift marked by a move away from treating crypto as an exceptional asset class and toward treating it more like any other form of value.

Artificial intelligence

Artificial intelligence (AI) was another growing theme in UK policy. The FCA has been increasingly vocal on AI, most notably through the Sheldon Mills-led review on how AI could transform retail financial services, alongside statements from both the FCA and the European Central Bank (ECB) on AI-related cyber threats. Isabella characterized the regulatory posture as pragmatic, currently guardrails over prescriptive rules.

Sanctions

The UK's designation of HTX, the fifth-largest exchange globally, was the biggest crypto sanctions action UK regulators have taken to date and will likely pressure-test existing UK guidance on indirect risk. Giles Thompson, head of the UK's Office of Financial Sanctions Implementation, signaled further crypto designations are likely. He also became the new president of the Financial Action Task Force (FATF) this quarter, with priorities centered on a risk-based approach, countering fraud, and public-private partnerships.

MiCA and AMLA consultations

In the European Union, July 1 marked the end of the Markets in Crypto Assets (MiCA) transitional period, closing the multi-year process from drafting to full application. Just before that, the European Commission opened its MiCA 2 consultation, reopening a fundamental question: is MiCA still fit for purpose, or should crypto eventually be folded into general EU financial services regulation, closer to the UK's approach?

Separately, the EU's Anti-Money Laundering Authority (AMLA) continued ramping up its work with a raft of consultations touching digital assets. The European Parliament also approved the digital euro, which Isabella tied to a broader EU conversation about monetary and technology sovereignty.

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Asia-Pacific: Movers, shakers, and sleeping giants

David framed the region using three categories: movers (who've already acted), shakers (who are actively building frameworks), and sleeping giants (who haven't moved in a meaningful way yet but whose eventual entry would be, in his words, "tectonic").

The movers: Singapore, Hong Kong, Japan

Among the movers, Singapore's Digital Token Service Provider (DTSP) regime remains in force, though a standalone stablecoin framework, first published more than two years ago, still hasn't taken effect. There are signs it could advance in coming months, and Singapore is also pushing real-economy stablecoin use cases through Project Bloom. Hong Kong has issued two licenses under its Stablecoins Ordinance since it took effect in August 2025, favoring a bank-led approach.

Japan continues refining its framework: amendments to the Payment Services Act created new categories for stablecoin issuers, and Japan has now approved three stablecoins for issuance, starting with USDC, then JPYC, and most recently RLUSD. Taiwan's legislature passed a Virtual Asset Services Act, with attention now turning to implementing rules.

The shakers: South Korea, Indonesia, Thailand, The Philippines

Among the shakers, South Korea's Digital Asset Basics Act remains pending in the National Assembly, with the market awaiting the government's own version after local elections on June 3 slowed momentum. Indonesia moved oversight to twin regulators, the Financial Services Authority (OJK) and Bank Indonesia, signaling a digital asset framework is coming soon.

Thailand unilaterally declared US dollar stablecoins like USDC valid trading pairs, with the Bank of Thailand signaling further policy development ahead. The Philippines' central bank has put crypto asset service provider (CASP) rules in place, with large remittance corridors positioning stablecoins to meaningfully lower remittance costs.

The sleeping giants: India, China

The sleeping giants, India and China, haven't moved decisively, but both are experimenting. India's central bank approved ARC, a privately issued instrument that functions as a hybrid central bank digital currency (CBDC), even as enforcement remains India's primary posture. China's e-CNY reached roughly RMB 7.3 trillion in volume in 2024, with the People's Bank of China shifting focus from retail payment use cases, which saw limited traction, toward institutional applications.

Enforcement and taxation

On enforcement, Singapore's June 2025 move to shut down offshore-only DTSP registrants illustrated a shift from an initially permissive posture to a tighter one. Japan, by contrast, has taken a narrow approach from the outset, approving stablecoin issuers judiciously rather than opening the door widely and later narrowing it.

Taxation also came up as a cross-cutting theme: Japan's finance minister signaled plans to move crypto taxation away from income-style rates toward something closer to capital gains, a shift David linked to a broader recognition that high taxation limits market dynamism, echoing the UK's own stablecoin tax review.

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United States: Agencies keep moving as the legislative calendar narrows

The GENIUS Act

Ari marked the one-year anniversary of the GENIUS Act, noting that the conversation has shifted decisively from legislation to implementation. The Office of the Comptroller of the Currency (OCC) issued a proposal addressing bank-side compliance, and TRM responded to a joint request for information from the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) on what strong anti-money laundering (AML) and sanctions compliance should look like for stablecoin activity.

The CLARITY Act

The Senate Banking Committee voted the CLARITY Act, GENIUS' companion market structure bill, out of committee this quarter. It now heads to a floor vote, where it will need to be reconciled with the House-passed version. Outstanding issues include ethics provisions covering officials' crypto holdings, though the bill already includes 20 provisions supporting law enforcement.

With midterm elections in November compressing the legislative calendar, Ari described real uncertainty about whether CLARITY clears the Senate in time. He noted, though, that some form of market structure is likely to emerge regardless: rules for what counts as a security versus a commodity, and how oversight splits between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Continued movements from SEC, CFTC, and OFAC

Even with Congress gridlocked, agencies kept moving. The SEC published a token taxonomy this quarter, among roughly 20 separate actions aimed at providing clarity, and Ari pointed to closer coordination between the SEC and CFTC than he's seen in years. On sanctions, OFAC isn't alone in listing crypto addresses tied to designations; Israel and Japan are taking similar steps, even if less systematically.

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Stablecoins and agentic commerce: From niche product to infrastructure

The UK's licensing and tax questions, APAC's mover-and-shaker frameworks, and the US' GENIUS Act anniversary all point to the same shift: regulators are moving from treating stablecoins as a novel product to treating them as financial infrastructure measured by real-economy utility.

David pointed to agentic commerce as the next stage of that shift. Circle's agent stack allows AI agents to discover, transact with, and pay each other directly, with compliance controls such as sanctions screening built in. To support this, Circle has made USDC divisible to a millionth of a dollar, enabling machine-to-machine microtransactions with no practical human equivalent. David compared it to the earliest days of the iPhone app ecosystem, when infrastructure unlocked applications no one had yet imagined.

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AI: A dual-use force for compliance and crime

The Financial Stability Board's consultation on responsible AI adoption in financial services, which sets out 12 practices for firms to weigh as they integrate the technology, was a recurring reference point, alongside similar guidance from the FCA and the ECB on AI-related cyber risk.

TRM's own H1 2026 data grounded the discussion: crypto hacks hit a record 207 incidents in the first half of the year, even as total losses fell to USD 972 million, well below H1 2025's USD 2.3 billion. Just 15% of incidents accounted for 76% of losses, concentrated in infrastructure-level attacks on signing architecture rather than smart contract exploits, with North Korea-linked actors responsible for roughly two-thirds of total losses.

Ari also flagged reports of a ransomware operation in which AI, not a human operator, carried out the attack end-to-end. He called it a preview of how quickly AI can scale existing threats.

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What we're watching in Q3 2026

In the US, the team will be watching whether the CLARITY Act can clear the Senate floor and reconcile with the House version before the November midterms further compress the legislative calendar, alongside continued GENIUS Act implementation through Treasury, OCC, FinCEN, and OFAC guidance.

In APAC, expect movement on Singapore's stablecoin framework, South Korea's Digital Asset Basics Act, and Taiwan's implementing rules for its new Virtual Asset Services Act. The team is also watching whether India or China take a more decisive step.

In Europe, the team is watching how the EU's MiCA 2 consultation lands, and how the market reacts when the UK's licensing gateway opens on September 30.

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