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Adrienne Harris's Bold Proposal at the Boundary
When Adrienne Harris, head of the New York Department of Financial Services (DFS), announced her upcoming departure, she left behind more than a legacy — she threw down a regulatory gauntlet.
In her final interview, she publicly endorsed the idea of crypto passporting between the U.S. and the U.K., meaning licensed crypto firms in one jurisdiction could operate in the other without redoing full compliance from scratch. (ft.com)
That’s a big shift from today’s reality, which is burdensome, fragmented, and often prohibitive for cross-border crypto firms.
Why Passporting? The Case for Smarter Borders
Here are the core arguments in favor — and the hurdles to overcome:
✅ What passporting could unlock:
Regulatory efficiency & lower costs. Firms wouldn’t need to undergo duplicate licensing, legal reviews, and compliance buildout in both markets.
Faster market access. A UK crypto firm could access U.S. users (or vice versa) faster.
Investor protection alignment. With a harmonized baseline, regulators can better impose oversight, AML / KYC, custody standards, etc.
Cross-border scale. Crypto is inherently borderless — so regulatory regimes should reflect that. Harris described the passporting idea as a “really interesting” opportunity given that nature. (ft.com)
Political momentum. The U.S. and U.K. have just created a joint task force (“Transatlantic Taskforce for Markets of the Future”) to explore collaboration in crypto and capital markets. (cointelegraph.com)
⚠️ Key challenges & risks:
Regulatory equivalence is hard. The U.K. uses its Overseas Recognition Regime; the U.S. has “comparability” regimes. Getting both sides to agree on what counts as equivalent in crypto (custody risk management, stablecoins, cybersecurity, etc.) is nontrivial. (gisukltd.com)
Regulatory arbitrage. If one jurisdiction weakens enforcement, capital can flow to the lighter side, undermining systemic integrity.
Political and legal constraints. U.S. federal vs state jurisdictional divides, constitutional constraints, and the U.K.’s own balancing act (e.g. satisfying both innovation and stability) all complicate matters.
Stablecoin contagion risk. Analysts warn that if the U.K. aligns too closely with U.S. approaches (notably via the GENIUS Act’s stablecoin framework), contagion from U.S. dubious stablecoin regimes could threaten U.K. financial stability. (thebanker.com)
Where Things Stand Now: Momentum + Caution
The U.S. and U.K. launched the Transatlantic Taskforce for Markets of the Future, with a remit to deliver recommendations within 180 days. (reuters.com)
Harris’s support signals growing openness among U.S. regulators to the idea of international interoperability in crypto. (ft.com)
Still, no formal framework or binding commitments exist.
In the U.K., regulators and legal minds are watching warily: overly lax rules or misaligned standards could expose the U.K. to systemic risk. (thebanker.com)
Not sure what this means for you yet? Check next section “What this means for you”
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What This Means for You (Crypto Founders, Investors, Builders)
If you operate across jurisdictions or hope to:
Opportunity | Action Steps |
Be early adopters | Stay engaged with task force updates. Position your legal/compliance team for cross‑jurisdictional design. |
Design for modular compliance | Build your systems so that they can meet “higher common denominator” standards (custody, KYC, audits) — easier to plug into multiple regimes. |
Advocate responsibly | Push for clear guardrails — anti‑money laundering, custody, audit. Don’t just ask for freedom; define standards. |
Watch stablecoin frameworks | Because stablecoins often carry outsized regulatory scrutiny and risk, ensure your issuance model anticipates U.S. + U.K. expectations. |
Prepare for uneven rollout | Passporting may roll out first for select activities (custody, exchanges) before more complex ones (tokenization, DeFi). Be ready to move early. |
Final Word + Next Moves
This moment is more than a regulatory curiosity — it’s a crack opening for truly global crypto infrastructure. A U.S.–U.K. passporting regime would reduce friction, lower compliance bloat, and unlock cross‑market scale. But it won’t happen overnight, and it is rife with political, legal, and technical pitfalls.
If you’re building across borders, your best bet is to stay alert, design for adaptability, and engage actively in the regulatory conversation.
Thanks for reading — I’ll keep you posted as this story develops.
Stay tuned for more in the next issue.
And don’t forget: follow @thefreedom.brief on Instagram for daily insights and first alerts on crypto, regulation, and digital finance.
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