Technological change is nothing new and legal systems have been responding to it since at least the introduction of the printing press. Changes in technology gives rise to questions that the law has not needed to answer before, or not at the same scale. To take an example, how should law and regulation respond to driverless vehicles? Should such vehicles be allowed on public roads? What safety requirements do such vehicles need to comply with? Who is liable for accidents caused by such vehicles?

Whilst there is an interesting history to how law and regulation respond to technological change, the purpose of this article is to identify different approaches that law and regulation is taking to technological change today, looking specifically at digital assets and digital money. These are important issues for business; the carrying on of transactions between AI agents is going to require some form of programmable money as measure of value and a means of exchange. Tokenisation has the capacity to reduce settlement times and make many transactions more efficient. At the same time, the stakes in decisions on where to invest feel higher than ever before, as such decisions face conflicting trends. Capital feels more mobile than ever and can search out opportunities across jurisdictions. Businesses have greater opportunities to create brand value globally and network effects create “winner take all” markets, where a Taylor Swift is dominant in a way no one else has been for decades. At the same time, countries are taking much more varied approaches to how these markets affect their economies. Some are adopting an “open doors” policy, others are pragmatically adopting regulatory regimes, whereas others have rejected these markets in favour of centralised national paradigms.

CBDCs vs private stablecoins

At present, the most obvious distinction is between those jurisdictions which are embracing private stablecoins, chiefly the US, and those looking to develop their own central bank digital currencies (all be it not using blockchain technology to do so), most notably China. Through the GENIUS Act, the US has developed a comprehensive regulatory framework for USD denominated stablecoins. The same time, the US has taken steps to prevent the establishment, issuance and use of CBDCs within the US. This ban affects not just foreign issuers but the US Federal Reserve itself.

China bans unapproved yuan stablecoins

Source: X

At the other end of the spectrum, China has maintained a ban on cryptocurrency transactions since 2017, which continues to be extended. For example, earlier in 2026, China was reported to have banned unauthorised offshore issuance of yuan-pegged stablecoins. At the same time China has been promoting the digital yuan, which is seen as part of a strategy to reduce reliance on the US dollar. The two superpowers represent opposites in their approach and, while interesting geopolitically, their different approaches to this most obvious issue are not the most elucidating for businesses since the choice likely amounts to being ‘open for business’ or not. Of more interest are some of the more subtle distinctions regarding how countries are responding to digital assets and programmable money.

Laying the groundwork?

Before one gets to regulation, a fundamental question is the legal nature of digital assets - in particular, are they a form of property and, if so, what form of property? Answering these questions are key to establishing dependable ways in which digital assets can be used. A legal regime that does not reliably address these questions can leave the most basic questions for business uncertain. Whilst this may not stop innovation, it puts a break on investment especially where the underlying issue manifests itself. The way to approach these issues can vary between countries based on the legal system with courts, legislators, academics and trade bodies all potentially playing a role. In England, whilst there are critical voices, a response to these questions has received broad acceptance. Work on the issues proceeded through the UK Jurisdiction Taskforce’s (“UKJT”) Legal Statement on cryptoassets and smart contracts, Law Commission projects and decided cases, and included a short piece of legislation (the Property (Digital Assets etc) Act 2025) to address one specific uncertainty. Whatever the questions about regulation, attention to these essential issues of legal classification is vital.

Early regulation vs “wait and see”

Some jurisdictions moved early to set up regulatory regimes for digital assets. An interesting example was the EU and its MiCAR regulation. In setting out a regime early, MiCAR gave market participants a level of predictability about the scope and content of regulation. Having a clear target as to what businesses need to do and, crucially, certainty that it will not change with the political weather, has encouraged many international digital asset companies set up MiCAR regulated entities in response. That early approach can also act as an anchor, pulling the regimes of other jurisdictions towards it, in terms of the scope and content of regulation. The EU’s approach has generated a lot of institutional interest, and early regulatory adoption can build credibility. But early adoption risks rules becoming out of date. Much of MiCAR was already written by the time of the FTX collapse. It appears that the EU digital assets industry has achieved good growth with no obvious failures, but there is a perception (fair or unfair) of unnecessary friction in the EU regime.

An obvious comparator to the EU is the UK’s approach, which has been to move later and in a more piecemeal fashion seeking to learn lessons from other countries’ approaches. The UK introduced AML requirements for cryptoasset firms at the same time as the EU, then moved to regulate financial promotion and is bring cryptoassets fully within the UK regulatory perimeter, with effect from October 2027. The theory behind this approach is that it will better enable the UK to calibrate its regime to reflect the experiences of other jurisdictions. Certainly, the UK’s consultations on the new regime have been extensive and industry has been given a good opportunity to consider and comment on the potential new rules. Whether that effort is worth it will partly come down to the extent to which this work has produced a better regime, or one that industry and the public better understand.

But that is not the only factor. The “wait and see approach” has allowed some crypto businesses to develop and grow in the UK whilst complying with the more limited current or developing regime and gain traction and size whilst not imposing full regulation on them from the outset. On the one hand, these businesses face a more complex and changeable path to dealing with emerging regulation; on the other hand, some of that greater complexity only arises when they are in a better position to address it. The approach has also given the UK the time and space to work out its views regarding digital assets. There was considerable scepticism at the regulatory level regarding these products and markets but those views have become somewhat more balanced, although there is room for further movement. There is also evidence that UK authorities have been listening to industry (see its response to criticism of holding limits on stablecoins discussed below).

Embrace the substitutes?

One way to distinguish different countries’ approaches to this area is how comfortable they are with products and services that are substitutes (sometimes less than perfect substitutes) for existing products and services. More specifically, to what extent are they comfortable with holdings of stablecoins as a substitute for deposits? The US has established a comprehensive prudential regime for stablecoins through the GENIUS Act and appears unperturbed about any potential for holdings of stablecoins to reduce bank deposits and its effect on US financial stability. Stablecoins appears to be an acceptable substitute for bank deposits - indeed, the point seems hardly to have been raised. The UK approach has been different in that the Bank of England has been exercised about the effect on bank deposits. In part, this has been to avoid customer confusion - setting up guardrails to reduce the risks a stablecoin issued by a bank is, in fact, a deposit with deposit protection sitting behind it. This lies behind the Bank of England preventing banks issuing stablecoins except through a separate company. But the UK approach has gone beyond this and the Bank has proposed strict holding limits on stablecoins, a move which provoked industry backlash - even from the House of Lords. In response, the Bank has said it is examining alternative means of ensuring financial stability (e.g. through issuance limits). It will be interesting (and important) to see where it lands.

Are there lessons for firms from this experience?

I think there are several general points for those firms navigating policy in this field:

• understand how policy can shift - firms need to think through and hedge against how the policy approach can change, as demonstrated by the variety by the shifts in US policy.
• good regulation can build credibility - there is comfort in dealing with firms that are well-regulated.
• respond to consultations - whether through trade associations or on your own. It may well make a difference.

The battle over stablecoins, CBDCs and tokenisation is often presented as a technology story. It is not. It is a competition for economic influence. Just as previous generations fought to host stock exchanges, payment networks and internet platforms, today’s race is about who controls the rails of programmable value. The jurisdictions that get law and regulation right will attract capital, talent and innovation. Those that get it wrong may discover that in the digital age, financial leadership can migrate far faster than anyone imagined.

This article first appeared in Digital Bytes (30th of June, 2026), a weekly newsletter by Jonny Fry of Team Blockchain