Recap: TRM Labs Quarterly Policy Roundtable, Q1 2026

This quarter, TRM Policy’s Ari Redbord and Angela Ang were joined by special guest Patrick Hansen (Senior Director, EU Strategy & Policy at Circle) for a fast-paced tour of what mattered most in global crypto policy in Q1 2026 — with a particular focus on what’s changing in practice for compliance, licensing, and supervision.

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

United States: Market structure stalls, while agencies keep shipping

Ari opened with the reality that the big US market structure debate remains stuck — with stablecoin yield emerging as a major fault line in negotiations. Even if that issue gets resolved, Ari noted there are likely more hurdles ahead, including questions around DeFi, AML, national security, and potential ethics provisions.

But even with Congress gridlocked, Ari emphasized that US financial regulators have increasingly taken matters into their own hands. In Q1, the drumbeat of agency action continued — from the Commodity Futures Trading Commission (CFTC)'s Crypto Sprint and the US Securities and Exchange Commission (SEC)’s Crypto Task Force, to new SEC guidance touching tokenization. Ari also flagged two especially practical developments for industry: an Office of the Comptroller of the Currency (OCC) Notice of Proposed Rulemaking, and ongoing Treasury rulemaking to implement the GENIUS Act, including how AML and other requirements will be operationalized.

Reflecting on the impact of recent US strikes on Iran, Ari noted that there often was a significant crypto nexus to every major geopolitical event in recent history. TRM recently put out analysis on how Iran's crypto market was reacting to the conflict, with its domestic crypto ecosystem having slowed sharply and shifted into a defensive posture after the strikes. 

APAC: Licensing, stablecoins, and institutional access advance

In another action-packed quarter across APAC, we continued to see stablecoins remain a theme, even as key regulators continue efforts to promote digital asset innovation and growth.

Notably, Hong Kong continued full steam ahead on its ASPiRe Roadmap to realize its crypto hub ambitions. Angela highlighted rapid legislative movement to expand the virtual asset regulatory perimeter: consultations concluded on regimes for virtual asset dealing and custody, and on virtual asset advisory and management, with a bill expected before the Legislative Council this year. On the products side, the Hong Kong Securities and Futures Commission opened up crypto margin financing, as well as crypto perpetuals for professional investors. On stablecoins, the Hong Kong Monetary Authority is gearing up to issue its first stablecoin licenses this month, while mainland China reiterated that stablecoins remain illegal — a move that some viewed as an effort to cool mainland interest in Hong Kong’s regime.

In Korea, stablecoins stayed politically complex. Angela described tensions between lawmakers, regulators, and industry over the design of its Korean won-stablecoin regime — specifically the question of whether majority stakeholders should be limited to banks. Still, Q1 brought progress on two other fronts: the launch of a long-awaited second phase of its institutional crypto trading pilot, and legislative amendments recognizing tokenized securities under the Electronic Securities Act and Capital Markets Act.

Meanwhile Australia is set to mark a new milestone in regulatory clarity, with its draft digital asset legislation moving rapidly through the legislative process since it was published in September 2025. With Australia moving to a new phase of regulatory maturity, Angela anticipated that conversations would shift toward implementation, with more attention on supervisory expectations, compliance build-outs, and operational readiness.

Europe: MiCA implementation deepens, and the UK advances its crypto and stablecoin regime

Meanwhile in Europe, the implementation of MiCA has marked the beginning of Europe's digital asset regulatory journey.

At the political level, Patrick highlighted two significant developments shaping the broader policy landscape: the digital euro debate, including discussions exploring distinctions between potential offline vs. online models, and the Commission’s broader capital markets integration and supervision package, which includes upgrades to the DLT pilot regime. For digital assets, he emphasized a structural linkage: scaling tokenized capital markets will require reliable on-chain settlement assets.  Within the EU framework, MiCA-regulated e-money tokens, or stablecoins, are designed to serve that function as settlement assets.

On implementation, Patrick pointed to evolving supervisory expectations such as recent EBA guidance indicating that firms providing e-money token custody/transfer may need a payments license as well as a MiCA authorization. As supervisory practice develops, firms assessing stablecoin-related services in the EU are closely monitoring guidance.

Patrick also noted the possibility of a MiCA consultation as early as around Easter, and a formal MiCA review proposal currently anticipated in 2027.

Meanwhile, the UK continues advancing its cryptoasset framework, with published plans for stablecoin issuance, custody, and broader cryptoasset services, pointing to licensing expected to start in October 2026 alongside a one-year transitional phase to support market adaptation.

Stablecoins: Growing utility, yield and the compliance capability of burn and reissue

If there was one constant theme across the past couple of quarters, it was stablecoins.

Angela reiterated that stablecoin policy is no longer “seasonal.” The growing role of stablecoins in cross-border payments is driving sustained regulatory attention and accelerating institutional involvement, which in turn raises the bar on compliance and risk management.

Patrick referenced available EU data indicating roughly 20 licensed e-money token issuers are currently operating in the EU, collectively issuing close to 30 MiCA-regulated stablecoins.  He also noted continued growth in euro-denominated stablecoins following MiCA’s application and as a reference point,  that the circulation of Circle's EURC grew from EURC 35 million to nearly EURC 400 million in about 18 months after MiCA came into application for stablecoins, reflecting increased demand for regulated euro-denominated stablecoins across both crypto-native use cases and emerging real-world payment and settlement applications.

On stablecoin yield, Patrick argued that global regimes are broadly aligned on the core principle: issuer-paid yield is generally a non-starter for most regulators, while the secondary-market question is more nuanced and likely to converge over time.

Ari also highlighted a compliance capability that he sees as transformative: stablecoin issuers’ ability to freeze, burn, and reissue tokens. In Ari’s view, the US' GENIUS Act does not undermine that model — it leans into it. The open challenge is ensuring law enforcement globally has the tools, training, and legal pathways to use those capabilities effectively, including reissuing funds to victims or authorities in appropriate cases.

Privacy and compliance: Selective disclosure goes mainstream

Angela flagged another theme rising quickly in 2026: the intersection of on-chain privacy and financial compliance. Drawing on TRM’s new white paper, she noted that privacy is not the enemy of compliance — it is a core feature of real-world finance. The question is how to support privacy programmatically through approaches like selective disclosure, so institutions can protect sensitive data while still meeting regulatory expectations.

Ari echoed the point: privacy and security are aligned, and technology, including concepts like zero-knowledge proofs, can help meet compliance objectives without creating “honeypots” of personal data. As policymakers increasingly ask what compliance should look like in DeFi, these models are becoming central to the conversation.

What we’re watching in Q2 2026

Looking ahead, Ari said the US focus remains on whether market structure can move past the yield debate and other sticking points, and how agencies and Treasury translate policy into supervision through GENIUS implementation and continued guidance.

In APAC, Angela highlighted a busy runway: Hong Kong’s expanded licensing regimes and initial stablecoin issuance coming into play, Korea’s next moves on stablecoins and institutional participation, and Australia’s transition into a more mature phase of regulation — including AML reforms being phased in through 2029 and the likelihood of more intensive supervision ahead of Australia’s FATF mutual evaluation.

In Europe, Patrick pointed to the growing importance of cross-border regulatory coordination for internet-native stablecoins, and the importance of  equivalence and recognition concepts to support the global circulation of stablecoins consistent safeguards.

All in all, another very busy quarter ahead focused on real-world utility, regulatory implementation, and global coordination.

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