The Linch Ledger β 18/07/25
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π Introduction
Back in June, we noted a global pivot: from regulation as theory to regulation as infrastructure. Since then, the shift has accelerated β and this past week confirms that the rules of engagement are no longer being debated, but deployed. The age of pilot programmes and policy papers is giving way to implementation, enforcement, and cross-border alignment.
If early 2024 was about drafting legislation, and the first half of 2025 was about licensing and technical standards, mid-July marks a third phase: the battle over credibility and consistency. In Europe, that means AMLA raising the alarm about jurisdictional arbitrage and AML fragility, while ESMA questions the integrity of some national licensing regimes (Malta, look away). In the Middle East, weβre seeing regulators like Dubaiβs VARA greenlighting consumer-facing innovation (crypto payments for plane tickets, no less) but only for firms that have earned their stripes. And in South Asia, the central bank of Pakistan is leapfrogging regulatory paralysis with a CBDC pilot and formal licensing framework in tandem.
These are not isolated stories. They're strands of a broader narrative weβve been tracking since this newsletter began: the convergence of crypto and traditional financial regulation, not in rhetoric but in plumbing. As the novelty of the asset class wears off, what matters now is compliance culture, licensing legitimacy, and interoperability, not just between blockchains, but between regulatory regimes.
Crypto is no longer testing the boundaries of the law for the sake of it. Increasingly, it is operating within them, or being forcibly brought to heel. Either way, the law is no longer behind. Itβs here.
πͺπΊ EU: AMLA Flags Crypto as Top Money-Laundering Risk
Europeβs newly launched Anti-Money Laundering Authority (AMLA) has identified cryptoassets as the top emerging threat to the EUβs financial integrity. According to AMLAβs inaugural assessment, the βopacity, cross-border nature, and high velocityβ of crypto transactions are contributing to a sharp rise in laundering risks β especially in jurisdictions where enforcement is weak.
π https://www.ft.com/content/84a4d927-3597-4c51-b8c9-86215f682eda
The agency signalled that crypto firms may be included among the roughly 40 βhigh-impactβ entities it will directly supervise beginning in 2028. The statement follows mounting pressure to clamp down on regulatory divergence between member states, particularly after France launched a major AML investigation into Binance.
This marks a turning point: cryptoβs AML obligations are no longer theoretical. AMLA is signalling that, like banks and payment institutions, CASPs must meet continent-wide expectations, or risk exclusion from the regulated financial system. The future of crypto in Europe may now hinge on who can prove they are not just licenced, but systematically low-risk.
π²πΉ Malta: Fast-Track Licensing Model Under Fire
Leaked ESMA minutes suggest Maltaβs fast-track crypto licensing regime has created serious supervisory gaps, with multiple large CASPs reportedly receiving approval despite poor internal controls and insufficient capital buffers. The regulator warned that βregime shoppingβ could undermine the entire MiCA framework.
π https://cincodias.elpais.com/criptoactivos/2025-07-17/un-paraiso-cripto-en-la-ue-el-desembarco-de-los-gigantes-del-sector-en-malta-despierta-el-temor-de-una-supervision-desigual.html
Maltaβs appeal to major exchanges like OKX and Crypto.com lies in speed, but at what cost? Reports suggest that oversight of onboarding, UBO checks, and liquidity requirements is far lighter than in France or Germany, raising uncomfortable questions about intra-EU regulatory credibility.
This is a stress test for MiCA. If the single rulebook allows for dramatically divergent application in different member states, the whole structure risks fragmenting. Expect growing pressure for ESMA or AMLA to intervene, not just as technical overseers, but as guarantors of minimum supervisory integrity.
π¦πͺ UAE (Dubai): Emirates Embraces Crypto for Payments
Emirates Airline has signed a preliminary deal with Crypto.com to allow crypto-enabled payments for onboard purchases, lounge access, and ticket upgrades β subject to regulatory approval by Dubaiβs VARA.
π https://www.reuters.com/world/middle-east/dubais-emirates-signs-preliminary-deal-add-crypto-payments-2025-07-09/
Dubai has long aimed to be a crypto hub, but this is its clearest sign yet that real-world adoption is on the table, provided the compliance boxes are ticked. VARA, which already enforces stringent marketing, custody, and licensing rules, is now signalling its willingness to let crypto go mainstream, under the right conditions.
This isnβt innovation for innovationβs sake. Itβs evidence of regulatory confidence. The lesson for other jurisdictions? Licensing must be a means to permissioned integration, not a regulatory dead-end. When crypto infrastructure is supervised properly, it becomes usable infrastructure.
π΅π° Pakistan: New Authority, New Currency
Pakistanβs central bank has launched a pilot for its digital currency initiative and, in parallel, announced the creation of a dedicated regulator: the Pakistan Virtual Assets Regulatory Authority (PVARA). The new framework will cover crypto exchanges, custody providers, mining firms, and stablecoins.
π https://www.reuters.com/world/asia-pacific/pakistan-central-bank-launch-pilot-digital-currency-says-governor-2025-07-09/
The appointment of former Binance CEO Changpeng Zhao (CZ) as a special adviser has raised eyebrows, but Pakistanβs dual-track model, pairing a central bankβissued digital rupee with a private licensing regime, mirrors the strategic ambition seen in UAE, Nigeria, and Brazil.
In contrast to many developed markets still paralysed by turf wars, Pakistan is opting for clarity over complexity. Itβs betting that economic inclusion and regulatory certainty can go hand in hand. It may well be right.
π§ Thematic Threads
π AML as infrastructure
Europe is no longer tolerating fragmented AML compliance. AMLA's warning suggests that crypto firms will soon be measured by banking-grade standards, with little tolerance for ambiguity or divergence.
π§Ύ Licensing needs legitimacy, not speed
Maltaβs licensing scandal shows that MiCAβs success depends on how it's enforced, not just how itβs drafted. Speed is no substitute for substance, and regulators at the EU level - not to mention other member states - are watching.
π³ Supervised utility is the next frontier
Dubaiβs Emirates partnership shows how licensing can be a launchpad for mainstream adoption, but only when it brings genuine regulatory confidence. Integration, not isolation, is the new goal.
π Dual frameworks arenβt contradictory
Pakistanβs coordinated rollout of a CBDC and a private sector licensing authority shows that public and private innovation can coexist, provided thereβs a regulatory spine to support both.
π Convergence through credibility
Across Europe, the Gulf, and South Asia, the common thread is no longer what crypto can do, itβs what it can prove. The future of digital assets depends on reputational capital as much as financial.
Until next week: remember that for crypto, the new frontier isnβt legal uncertainty β itβs operational legitimacy.