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US and Asia Outpace EU in Crypto Regulation—Is Europe Falling Behind?

The post US and Asia Outpace EU in Crypto Regulation—Is Europe Falling Behind? appeared first on Coinpedia Fintech News

The European Union (EU) is facing growing concerns that it may be losing its edge in the global crypto race, with experts warning it could become a “crypto flyover zone” between the US and Asia. While the EU was once a pioneer in digital asset regulation, newer, more agile jurisdictions are now pulling ahead.

EU at Risk of Falling Behind in Crypto Regulation?

Speaking at the DigiAssets Conference 2025, Catriona Kellas, International Legal Lead for Figital Projects, sounded the alarm.

“There is a real risk with this technology that jurisdictions which were perhaps at the very forefront a few years ago—it’s so easy to fall behind,” she stated.

She emphasized that US momentum and Asia-Pacific (APAC)’s flexible frameworks are pressuring the EU, which is still locked in slower legislative cycles. While the EU remains in a “strong place,” Kellas warned it risks becoming a flyover zone if it fails to adapt quickly.

Spotlight on EU’s Digital Ledger Technology (DLT)

Kellas highlighted the importance of the EU’s Digital Ledger Technology (DLT) Pilot Regime, which has been in effect for only a few years. She acknowledged EU regulators are actively working to revise and optimize the system, but said more needs to be done.

The DLT Pilot Regime allows for the issuance, recording, transfer, and storage of tokenized financial instruments on dedicated blockchain infrastructures. Kellas noted that the EU is at least “asking the right questions” — especially around MiCA 2, the potential update to its flagship crypto framework.

What the EU Has Done in 2025

Despite growing criticism, the EU has made notable progress this year:

  • Introduced stricter environmental regulations for crypto operations to reduce carbon emissions.
  • Implemented the Digital Operational Resilience Act (DORA) to strengthen IT and communication security across financial services.
  • Expanded cybersecurity measures for digital asset service providers.

These steps signal a push toward sustainable and secure crypto integration — but experts argue they are not enough to keep pace with more nimble jurisdictions.

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MiCA: A Game Changer or a Bottleneck?

The Markets in Crypto-Assets Regulation (MiCA) officially came into effect in January 2025, aiming to bring uniformity across the EU. It enables member states to issue crypto licenses that grant companies access to all 27 EU countries.

However, the rollout has been slower than expected, and some worry uneven enforcement and bureaucratic delays could undercut MiCA’s effectiveness. While MiCA’s ambition is to bring crypto into the traditional financial system, delays could discourage innovation and push crypto firms toward more favorable regions.

Bottom Line: Can the EU Regain Its Lead?With the US and APAC advancing rapidly in crypto innovation and regulation, the EU must accelerate updates to MiCA, enhance its DLT infrastructure, and reduce legislative delays to stay competitive. Otherwise, it risks becoming a passive observer — a flyover zone in the fast-evolving digital asset world.

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