Web3 Reg News: Revisions or Reversals?

July 1, 2026 – July 15, 2026

The first half of July 2026 marks a period of regulatory discussion and fluctuation across major financial hubs. While the United States struggles to progress its proposed CLARITY Act before the end of the month, regulators in the United Kingdom and Europe are actively refining and expanding their digital asset rulebooks. Whilst some mature markets are fine tuning regulatory standards and controls, other jurisdictions continue to grapple with fundamental questions of crypto legality and safety, notably in India and Pakistan where prohibitions could be on the horizon, though for different reasons.

• Fine-Tuning Frameworks and Oversight

US Senate Returns to CLARITY Act Deadlock 

The US digital asset sector is holding its breath for the result of the Senate’s renewed discussion on the CLARITY Act as it returns from its Fourth of July recess. Lawmakers face a tight legislative window to pass the landmark Digital Asset bill as the next recess is scheduled for the 8th of August. Industry advocates and key lawmakers warn that the bill faces a hard deadline of August 7th to clear the Senate floor; however, negotiations remain complicated by debates over judicial and legislative ethics, which threaten to derail bipartisan consensus. If the bill is not passed soon, progress on meaningful digital asset legislation will likely stall for at least a year and see the continuation of regulatory uncertainty for users, developers and investors, impacting the US’s position as a crypto leader.

FISMA Extends MiCA Review 

The European Commission’s Financial Stability, Financial Services and Capital Markets Union (FISMA) has announced that its MiCA evaluation consultation will remain open for an extra month, until September 30, 2026. FISMA has outlined a dual strategy designed to separate everyday consumer sentiment from complex institutional oversight. The first is designed to gather qualitative feedback on everyday usage, general understanding, and personal experiences with digital assets, whereas the second solicits feedback on existing administrative burdens while evaluating whether MiCA’s regulatory perimeter should be expanded to cover decentralized finance (DeFi), crypto-lending, staking protocols, and non-fungible tokens (NFTs). Through this, regulators will gain precise information for targeted legislative refinements, hopefully without disrupting the ongoing development of the crypto space in the EU. 

UK FCA and Bank of England Advance Pragmatic Stablecoin Rules 

In the United Kingdom, the Financial Conduct Authority (FCA), in coordination with the Bank of England, has finalized a comprehensive set of landmark rules designed to cement the UK's position as a global crypto hub. Taking industry feedback into account, regulators have introduced significant, pragmatic adjustments to the stablecoin issuance and prudential frameworks. Regulators have also tailored trading rules to better reflect market operations and removed overly burdensome public disclosure requirements. Authorization for firms that require it will open in September 2026, before becoming mandatory in October 2027, as the UK seeks to provide institutional clarity without stifling innovation. 

• Bans and Warnings

India's Central Bank Reasserts Call for Ban

Internal government documents have revealed that the Reserve Bank of India (RBI) has reasserted its call for a cryptocurrency policy ‘leaning towards prohibition’. The central bank continues to urge that traditional banks and financial institutions be barred from dealing in or gaining exposure to crypto assets and privately issued stablecoins. Simultaneously, India’s tax department has issued stark warnings regarding evasion risks, noting that peer-to-peer trades and transactions routed through offshore exchanges make it difficult to track beneficial owners and recover the nation's mandatory 30% tax on crypto gains. Despite the policy ambiguity and potential for bans, India's crypto user base continues to expand, intensifying the conflict between regulatory prohibition and domestic adoption.

Pakistan’s Regulators Seek Dialogue Following Crypto Fatwa 

As Pakistan builds out its formal digital asset regime under the Virtual Assets Act 2026, regulators are navigating a delicate intersection between financial innovation and Islamic law. Despite boasting roughly 40 million crypto users - the third-largest user base globally - the sector is now facing significant scrutiny following a fatwa issued by prominent Islamic scholars. The ruling declared digital asset payments, explicitly naming stablecoins like USDT, impermissible under Shariah law, arguing they fail to qualify as legitimate wealth. Rather than retreating or issuing public pushback, the Pakistan Virtual Assets Regulatory Authority (PVARA) has met with Islamic finance scholars to foster an ongoing dialogue. PVARA is advocating for a rigorous technical and Shariah-compliant assessment across distinct digital asset categories, ensuring that blockchain innovation and investor protection can progress in harmony with religious principles.