Estonia has passed a bill demanding higher standards from digital asset service providers, marking a significant step in crypto regulation. The law, effective from March 20, aims to boost the industry’s reliability by introducing rigorous legal requirements. Estonia, a hub for crypto services, will now see these companies undergoing financial oversight akin to banks, a first in its regulatory landscape. The shift comes as the Financial Intelligence Unit trims the number of crypto businesses to about 50 from a previous high, citing the need for secure client asset management. Starting in 2026, the Financial Supervision Authority will oversee these providers, enforcing stricter operational standards and hefty fines up to €5 million for non-compliance. This move, prompted by cyber thefts and failures within the sector, seeks to protect investors and stabilize the market. Providers must secure new regulatory licenses by 2025, transitioning from the current framework to ensure enhanced security and investor protection.

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