Retail crypto TXs have doubled on regulatory clarity: TRM Labs
News Summary
Global retail crypto transactions surged by over 125% for two consecutive years in 2024 and from January to September 2025, driven by improving regulatory clarity, according to blockchain intelligence firm TRM Labs. This activity primarily revolved around practical use cases such as payments, remittances, and preserving value in volatile economic conditions, indicating an increasing role for individuals in shaping the industry's evolution. In the US, TRM Labs attributed the growth, which began in 2023 and extended past 2024, to a combination of political, regulatory, and structural factors that have opened the market to new participants, including bills like the GENIUS Act for stablecoins and the CLARITY Act for market structure. Pakistan's crypto scene also benefited from friendly lawmakers and policy moves, such as establishing a Crypto Council, boosting grassroots adoption. The report also found that crypto uptake increased despite bans or restrictions in some countries, like Bangladesh and several North African nations. TRM Labs explained that ongoing capital controls and limited access to foreign exchange made crypto an attractive alternative for individuals seeking alternatives to traditional financial systems. This aligns with a September 2023 report by the Financial Stability Board and International Monetary Fund, which concluded that blanket bans are ineffective and often increase incentives for people to use cryptocurrencies.
Background
Since the start of 2025, the US has taken significant steps towards crypto regulations, with bills like the GENIUS Act aimed at stablecoins and the CLARITY Act, a market structure bill. This indicates an active approach by the Trump administration to shape the legal framework for cryptocurrencies, aiming to foster market development and attract new participants. Concurrently, global crypto adoption has shown a complex pattern. While some jurisdictions have seen growth spurred by clear regulatory frameworks, others, despite outright government bans or severe restrictions, have witnessed their citizens turn to crypto as a means to circumvent capital controls or hedge against economic uncertainties. Global financial bodies like the IMF and FSB have long indicated that blanket bans are often ineffective and counterproductive in the digital age.
In-Depth AI Insights
Beyond fostering innovation and regulatory clarity, what deeper strategic objectives might the Trump administration have in rapidly advancing crypto legislation in 2025? - Cementing Dollar Hegemony: By clarifying stablecoin regulations, the administration aims to ensure USD-pegged stablecoins dominate the global digital economy, indirectly preserving the dollar's status as the world's reserve currency. - Attracting Digital Capital and Talent: In the global race for digital assets, providing a clear legal framework positions the US as a global hub for crypto innovation and investment, attracting international capital and technological expertise. - Geopolitical Considerations: Countering advancements by other nations (e.g., China) in digital currencies and ensuring US leadership in global digital financial infrastructure, particularly in digital payments and cross-border settlements. The report highlights rising crypto adoption even in countries like Bangladesh with outright bans. What does this suggest about the efficacy of national capital controls and the future of financial sovereignty? - Decreased Efficacy of Capital Controls: The growth despite bans indicates that national capital controls are increasingly ineffective in the digital age, as cryptocurrencies offer individuals a bypass around traditional financial barriers. - Challenges to Financial Sovereignty: This trend challenges a state's traditional ability to control monetary flows and financial transactions, suggesting a future where financial activity could be more decentralized, thus weakening direct state intervention in the economy. - Fostering Alternative Financial Systems: In regions where traditional financial systems are inefficient or restricted, cryptocurrencies are becoming a de facto alternative for the populace, driving the diversification of global financial infrastructure. How might retail-driven utility in crypto, particularly for payments, remittances, and value preservation, reshape the global financial landscape and traditional banking models? - Disrupting Traditional Remittances: Cryptocurrencies offer faster, lower-cost cross-border remittance options, directly threatening the profit margins of traditional remittance service providers like Western Union. - Driving Financial Inclusion: In unbanked or underbanked regions with weak traditional financial infrastructure, crypto provides financial services to hundreds of millions, fostering broader financial inclusion. - Pressuring Traditional Banks to Transform: Facing competition from cryptocurrencies, traditional banks will be compelled to accelerate digital transformation, explore blockchain technology applications, and potentially partner with crypto service providers to maintain relevance and competitiveness.