2026 is proving to be a strong year for financial regulators all over the world to introduce and refine guidance on digital assets. With key pieces of regulation including the Markets in Crypto-Assets (MiCA) regulation in the EU and the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) in the US already in place, this year the focus has been providing greater clarity for firms.
We spoke to Wayne Hughes, head of digital asset, and Haroun Boucheta, head of public affairs, from BNP Paribas’ Securities Services business, about how regulators are working with the industry, and what else is needed to further institutional adoption of digital assets.
CP: How would you characterise the current state of regulation in the EU?
WH: Our industry constantly looks for ways to improve regulatory clarity in the digital assets space, and we are happy with how the EU has approached creating regulation. In an ideal world, we wish it could move a little faster, but we do believe that a relatively cautious approach from the EU which aims to provide clarity on the roles, responsibilities and liabilities in the space has helped the industry to feel more comfortable to get involved.
HB: The European Commission released a new consultation on MiCA recently, which we will be contributing to and sharing our opinions on the current framework. Under the current regime, the most important areas for clarity for our team is the role and duty of the custodian, the asset protection rules as well as the liability requirements. As a securities services provider we need a clear framework for that.
Together with some industry peers from the securities services and trading business, we have had a lot of discussions on the product scope to make sure that the products are well defined.
CP: How does the EU compare to the US?
WH: This is still a relatively immature market, especially considering wholesale institutional activity, which makes comparisons very different. The US has made important advancements in a relatively short timeframe, and the current speed of advancement is quite impressive.
The US market is moving very quickly in the digital asset space with a supportive regulatory environment, which has a positive impact as it’s motivating other regions to speed up their process.
HB: There’s a lot of talk about the GENIUS Act in the US, but the scope of that legislation is very small compared to the EU’s MiCA regulation. The GENIUS Act is a specifically targeted regulation for the stablecoin industry, whereas MiCA is much broader and applies to other products, so that also makes it difficult to compare the two.
Overall, we are clearly seeing a big push on both sides of the Atlantic.
CP: What are your predictions for the next three to five years?
WH: Our perspective, which we believe is now shared fairly widely across the industry, is that there isn’t going to be a big bang moment where things change dramatically from one day to the next. Instead, we expect there may be a long transition period where digital and traditional assets coexist.
Within that, it’s likely that some areas will move quicker than others. The areas with more friction in the market today will naturally be the targets for the first use cases, compared to products such as cash equities, which offer some opportunities for efficiency gains but are not where the low hanging fruit really is.
During that potential transition period, the traditional rails would have to be maintained and run parallel to the work firms are doing to develop the new digital rails. We believe this transition period may be a pain point for our clients and our focus is to assist them managing the complexity of this process.
CP: What are the main challenges the industry still needs to overcome?
HB: We need a clear view and certainty around regulation, so we don’t need to have new requirements, but at the moment there is uncertainty around the legal and regulatory framework. The Commission is trying to fix the rules as soon as possible, and we are currently in discussions with policymakers on that and hoping that the rules will allow for further innovation. We trust that will be the case, given the current trend, but we need to settle that fairly quickly to meet the Commission and EU policymakers’ ambitious timeline. We hope that in the course of 2026 everything will be fixed, including on the digital space, and that will help us to work on short-, medium- and long-term plans.
WH: There are some other challenges: one is around fragmentation. From our perspective there are currently too many competing blockchains and that is really holding back the advancement.
Another is collaboration. Within our industry, companies naturally compete against each other, but we are going to have to find those non-competitive areas and work together for this to be successful.
