As companies adopt new technologies like crypto and AI, governments worldwide will need to revamp their existing laws to account for companies that will become more reliant on machines and less reliant on humans. Regulations are also demanded by the participants of the crypto asset markets.

Regulation struggles to keep up

In an environment of tightening margins and heightened competition, yield is no longer optional — it has become a necessity. This is how the near future of crypto asset markets is seen by James Harris, Group CEO of Tesseract.

“This gold rush mentality obscures a critical truth defining the industry’s future: Not all yield is created equal. The market’s obsession with headline returns sets up institutions for catastrophic losses. Protocols advertise double-digit returns, centralized platforms tout simple ‘yield’ products. Marketplaces promise instant access to borrowers. These disclosures are not nice-to-have nuances for serious institutions, but table stakes that mark the line between fiduciary responsibility and unacceptable exposure,” Harris sums up the current characteristics of some parts of the financial market.

Harris is worried about the quality of the regulatory framework of the crypto asset sector. And he is not alone. Jeremy Allaire, CEO of the stablecoin giant Circle, warned that governments are lagging behind the quick evolution of AI and decentralized finances.

“Most of our legal systems are not built around the idea of a corporation itself being entirely run by machines on the internet. My own belief is that over the next five years—and certainly over the next five to 10 years—almost every legal system in the world will need to be a machine-governed economic system,” Allaire said during the Fortune Global Forum that took place recently. According to him, international law will have to be updated.

MiCA as a starting point

James Harris sees the first step toward such an update in the already approved European directive known as MiCA (Markets in Crypto-Assets). The directive took effect in December 2024. “This regulatory clarity matters because MiCA is more than a compliance box to tick; it represents the minimum threshold that institutions will demand. Yet the vast majority of yield providers in the crypto space operate without oversight, leaving institutions exposed to regulatory gaps that could prove costly,” Harris said.

According to him, the future belongs to a specific type of crypto asset provider: “Those delivering yield that is attractive, defensible, compliant and built on transparent risk management principles. The market is separating along these lines. The implications will reshape the entire crypto yield landscape,” Harris concluded.

Sources:

https://fortune.com/2025/10/28/circle-jeremy-allaire-ai-stablecoins-crypto-machine-governed-economy-system/

https://www.tradingview.com/news/cointelegraph:d94726fb8094b:0-regulated-crypto-yield-wins-as-institutions-demand-substance/