Web3 Reg News: Enhancing Regulation and Advancing Crypto

May 16, 2026 – May 31, 2026

The latter half of May 2026 continues the trend of securing the digital asset industry for both businesses and users. While federal agencies in the United States look to tighten Anti-Money Laundering (AML) controls over stablecoins, individual states like South Carolina are aggressively legislating to protect crypto users and miners. Internationally, the focus is squarely on long-term viability and financial integrity. The European Union has already begun assessing whether its historic MiCA framework requires updating, whilst developing tech hubs like Costa Rica and Pakistan are passing foundational laws to formally bring Virtual Asset Service Providers (VASPs) under strict regulatory and AML oversight. As the month closes out, the landscape of increasingly complex compliance requirements grows.

• United States: Federal Oversight vs. State-Level Advocacy

FDIC Tightens Rules for Stablecoin Issuers 

At the federal level, the US has been strengthening digital asset compliance. The Federal Deposit Insurance Corporation (FDIC) has released proposed rules aimed at Permitted Payment Stablecoin Issuers (PPSIs) operating under the GENIUS Act. The proposal would mandate that FDIC-supervised stablecoin issuers establish rigorous Bank Secrecy Act (BSA), AML/CFT, and economic sanctions programs. By aligning supervision mechanisms directly with FinCEN requirements, the FDIC aims to curb the use of digital assets by sanctioned entities and illicit actors. The proposal also outlines a formal process for the FDIC to consult with FinCEN before initiating enforcement actions, ensuring a unified federal front on financial crime.

South Carolina Enacts Pro-Crypto, Anti-CBDC Law 

At the state level in the US, South Carolina has moved to create a highly favorable environment for the digital asset industry. The Governor recently signed Bill S. 163 into law, establishing broad protections for crypto users and businesses. The law explicitly bans state and local governments from requiring or accepting payments in Central Bank Digital Currencies (CBDCs). Conversely, it protects the right to self-custody digital assets via hardware wallets, exempts cryptocurrencies used for payments from additional state taxes, and removes money transmitter licensing requirements for node operators and crypto-to-crypto trading. Furthermore, the legislation offers robust protections for crypto mining operations, prohibiting local municipalities from imposing targeted noise limits or zoning restrictions on miners in industrial areas. 

• Global Frameworks and AML Maturation

European Commission Opens Consultation on MiCA's Future 

Despite being the first major jurisdiction to implement a comprehensive crypto rulebook, the European Union is already looking at its impact and future. The European Commission has officially opened a public consultation until the 31st August to evaluate whether the Markets in Crypto-Assets (MiCA) regulation remains ‘fit for purpose’. As global digital asset markets evolve at a rapid pace, and as other jurisdictions begin to implement their own frameworks, the EU is seeking feedback to determine if MiCA requires structural updates to ensure it maintains its effectiveness, balances innovation with security, and continues providing robust consumer protections.

Costa Rica Approves Bill Targeting Crypto Money Laundering Risks 

Costa Rica’s Legislative Assembly has unanimously approved a bill aimed at regulating cryptocurrency service providers to mitigate money laundering and terrorist financing risks. Amending its existing financial crime laws, the legislation requires VASPs to register with the General Superintendency of Financial Institutions (Sugef). While the law explicitly states that cryptocurrencies are not recognized as legal tender or foreign currency, it mandates that businesses handling digital asset exchanges, transfers or custody implement rigorous KYC/AML controls, maintain updated risk assessments, and report to authorities. Noncompliance carries heavy penalties, with potential fines reaching up to $90,000 in value. 

Pakistan Enacts Landmark Virtual Assets Act to Regulate Crypto Firms 

Pakistan has officially transitioned from temporary digital asset rules implemented in 2005 to a permanent, statutory framework with the enactment of the Virtual Assets Act 2026. The legislation establishes the Pakistan Virtual Assets Regulatory Authority (PVARA), granting it the power to license, supervise, and regulate VASPs operating within the country. Unlicensed operations now face severe fines and criminal penalties. Designed to align Pakistan’s burgeoning digital economy with global financial integrity and AML standards, the law provides the regulatory certainty needed to attract credible blockchain businesses while prioritizing investor protection and market transparency.