Regulatory Changes Significantly Impacting Two-fifths of Global Fintech Businesses

BVI Finance Destination Digital reveals the growing impact of regulatory fragmentation on fintech and crypto businesses worldwide.

The findings come as a pro-crypto and blockchain administration in the United States has passed the Genius Act – the first major US national crypto legislation, while the United Kingdom also recently published draft legislation for crypto assets and the industry continues adapting to the Markets in Crypto-Assets Regulation which came into force last year in Europe.

Further findings from the survey of 451 fintech executives include:

• Close to two-fifths of global businesses (39%) cited regulatory changes and compliance as a geopolitical trend having a significant impact on their business.
• Over a quarter (28%) of global fintech executives say navigating complex and ever-changing regulations is a key issue for their business – particularly burdensome for those operating across multiple markets, where differing standards and governance structures can create inefficiencies and increase costs.
• When considering regulatory challenges, 32% of fintech leaders emphasize the importance of a jurisdiction with a clear licensing framework for fintech and virtual assets.
• Privacy and asset protection laws are a priority for deciding where fintech businesses choose to incorporate, with 29% of businesses valuing strong legal safeguards for their operations.
• 24% of fintech leaders emphasise the importance of a business-friendly legal framework, helping to reduce operational complexity and allow the businesses to foster innovation.

Elise Donovan, CEO, BVI Finance, said: “Fintech companies are a different generation of business – operating cross-border is a non-negotiable. However, this means their models are susceptible to regulatory shifts and disparity between markets.

“Regulatory certainty is vital for fintech and crypto business growth. Predictable licensing, clear rule enforcement and cross-border recognition all enable informed long-term planning and allow these businesses to instead focus on delivering new products and services to customers as quickly as possible.

“With the focus on finding a jurisdiction to incorporate that offers certainty and stability, the BVI stands out due to its favourable regulatory environment and flexible company and partnership laws, facilitating efficient business operations and exits.”

With insights from the BVI Finance Destination Digital report,