The European Commission has imposed a €200 million fine on Temu after finding that the online marketplace breached obligations under the Digital Services Act by failing to properly assess and mitigate systemic risks linked to illegal products sold to consumers in the EU.
According to the Commission, Temu’s 2024 risk assessment did not meet DSA requirements because it relied on general information about the wider e-commerce sector rather than evidence specific to its own platform. Regulators also found that the company significantly underestimated the likelihood that the EU consumers would encounter illegal or unsafe products.
The investigation drew on mystery shopping exercises and information from customs and market surveillance authorities. Findings included chargers that failed basic safety requirements and baby toys that contained chemicals above legal limits or presented choking hazards.
Regulators also criticised Temu for failing to sufficiently assess how recommender systems and influencer promotion programmes could contribute to the spread of illegal products on the platform.
Temu must now submit a detailed action plan explaining how it will address the shortcomings identified by the Commission. The plan will be reviewed with the European Board for Digital Services before implementation requirements are set. Failure to comply could lead to additional penalties under the DSA.
The decision is part of a wider Commission investigation into Temu, including issues related to potentially addictive design, recommender systems, and data access for researchers.
Why does it matter?
The fine marks one of the most significant enforcement actions under the Digital Services Act against a major online marketplace. It shows that the DSA is being used not only to address illegal content, but also to require platforms to assess and reduce consumer safety risks linked to illegal and unsafe goods. The case reinforces the EU’s focus on proactive risk management by very large online platforms, including how marketplace design, recommendations, and influencer promotion can amplify the reach of harmful products.
Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!
Speaking in Frankfurt, Piero Cipollone, Member of the ECB’s Executive Board, said digitalisation is reshaping retail payments, wholesale financial markets, and cross-border payment infrastructure across the euro area. He warned that if central bank money does not adapt to technological change, it risks losing relevance in key parts of the economy, weakening public money’s role as an anchor of stability and increasing fragmentation in the financial system.
Retail payments are becoming more digital and platform-based, while wholesale financial markets are being shaped by tokenisation and distributed ledger technology. Cipollone said digitalisation could help reduce costs and speed up cross-border payments if it is used in a way that avoids further fragmentation.
The ECB’s policy response is built around three areas: preparing for a possible digital euro for retail payments, enabling DLT-based transactions to settle in central bank money, and interlinking fast payment systems to improve global cross-border transactions.
Cipollone said the digital euro would be designed as a digital form of cash for day-to-day retail payments, not as an investment product. He said it would complement physical cash and private payment solutions while ensuring that people retain access to a public digital payment option across the euro area.
For wholesale markets, the ECB said tokenisation could make capital markets more efficient, but only if tokenised settlement assets are available. The Eurosystem plans to allow DLT-based transactions to settle in central bank money from September 2026 through its Pontes project, while its Appia work will develop a longer-term vision for Europe’s tokenised financial ecosystem.
Cross-border payments remain a concern because they are still too slow, costly, and opaque. The ECB said interlinking fast payment systems could help reduce these frictions while protecting the monetary sovereignty of participating jurisdictions.
Why does it matter?
The speech frames digital money as a financial stability and sovereignty issue, not only a payments innovation story. As payments, markets, and cross-border settlement become more digital and tokenised, the ECB wants central bank money to remain the risk-free settlement asset, anchoring trust in the financial system. The message is also a response to the risk that private platforms, stablecoins, and fragmented infrastructures could weaken the uniformity of public money if central banks fail to adapt.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
A Chainalysis analysis of crypto compliance monitoring shows that transaction surveillance standards across financial institutions and crypto firms have tightened significantly since 2020.
The report says nearly half of organisations onboarded in 2026 now operate at alerting standards that would have placed them among the top 10% for alerting strictness in 2020. Chainalysis said newer entrants are launching with more aggressive Know Your Transaction monitoring configurations, reflecting the maturation of digital asset compliance frameworks.
According to the analysis, traditional financial institutions generally apply stricter detection thresholds than crypto exchanges. Financial institutions set lower dollar-detection floors for both illicit and non-illicit categories, meaning they are alerted for smaller sums and apply a more conservative monitoring approach.
The gap is particularly visible in indirect exposure to non-illicit flows. Chainalysis said crypto exchanges set average alerting minimums of USD 950, compared with USD 150 for traditional financial institutions. For illicit funds, both groups apply tighter thresholds, with exchanges setting alerts from USD 100 and financial institutions from USD 55.
The report also highlights a persistent gap between direct and indirect exposure monitoring. Direct exposure refers to funds arriving immediately from a known illicit source, while indirect exposure covers funds that pass through intermediary addresses before arriving at the final destination. Chainalysis said direct monitoring has become more standardised, but indirect exposure thresholds often remain 10 to 20 times higher than direct thresholds in categories such as ransomware, fraud shops, scams, darknet markets, and sanctioned jurisdictions.
Regional differences also remain. Chainalysis said direct exposure monitoring is broadly uniform across regions, while indirect exposure thresholds vary more significantly. EMEA organisations generally apply the strictest and most concentrated thresholds, while APAC organisations show more lenient and varied configurations.
Chainalysis said the findings show a compliance sector in transition, with stronger direct exposure monitoring but continuing inconsistency in how organisations treat indirect risk.
Why does it matter?
The findings point to a maturing crypto compliance environment, especially as traditional financial institutions expand into digital assets. However, the persistent gap in indirect exposure shows that illicit actors may still find room to exploit inconsistent monitoring practices. As funds move through intermediary wallets and cross-regional networks, calibration of indirect risk controls is becoming a key issue for regulatory defensibility, counterparty due diligence, and institutional trust in digital asset markets.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
Argentina’s national government has sent Congress a bill aimed at regulating online gambling, preventing gambling addiction, and blocking financial and technical support for unauthorised betting platforms.
The bill, titled the Law on the Prevention of Gambling Addiction and Regulation of Online Gambling, would coordinate action between several state bodies, including the Central Bank of Argentina, the National Securities Commission, the National Communications Agency, and NIC Argentina.
The proposal would prohibit financial institutions, payment service providers, and virtual asset service providers from offering services to unauthorised gambling operators. It would also allow NIC Argentina to suspend, disable, or remove domains reported by competent authorities in relation to illegal gambling.
The bill also restricts the promotion, sponsorship, and dissemination of illegal gambling platforms across television, radio, public spaces, social networks, and digital environments. Media companies, agencies, and content creators would be required to verify that promoted operators have official authorisation. Measures to protect minors are also included.
Authorised platforms without effective technological systems to identify age and exclude minors would be prohibited from operating financially. The Central Bank would also be required to block money transfers from accounts linked to minors to gambling operators.
The proposal would amend the Criminal Code to introduce prison terms of three to six years for those operating unauthorised betting systems. It would also create a new offence, punishable by two to four years in prison, for those who provide essential financial, technological, advertising, or digital services to unauthorised operators.
The bill follows growing scrutiny of online betting and prediction markets in Argentina and abroad, including earlier action against Polymarket for alleged unlicensed gambling.
Why does it matter?
The proposal shows how governments are targeting the infrastructure that enables illegal online gambling, including payment systems, domain names, advertising channels, and crypto-related services. By including virtual asset service providers, Argentina is treating crypto payment rails as part of the regulated gambling ecosystem when they are used to support unauthorised betting platforms. That could raise compliance expectations for crypto firms, payment providers, media companies, and online platforms.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
Project Agorá, led by the Bank for International Settlements and the Institute of International Finance, has demonstrated how tokenisation and programmable technologies could help address long-standing inefficiencies in wholesale cross-border payments.
Using a dedicated prototype, the project executed atomic settlement across multiple currencies and jurisdictions, allowing cross-border transactions to settle simultaneously and indivisibly.
The project used tokenised central bank reserves and tokenised commercial bank deposits as settlement assets within a tokenised ecosystem. According to the European Central Bank, the findings show that the safety and integrity of wholesale cross-border payments can be preserved while modernising settlement infrastructure.
The Eurosystem, comprising the ECB and the central banks of the 21 euro area countries, participates in Project Agorá, which the BIS and the IIF run with leading central banks and more than 40 financial institutions. The next phase of the project will focus on real value testing.
Insights from the project will support the Eurosystem’s Appia and Pontes initiatives, both designed to strengthen Europe’s tokenised financial ecosystem. Pontes is expected to link market distributed ledger technology platforms with TARGET Services by September 2026, while Appia will outline the longer-term vision for a European tokenised financial ecosystem.
The ECB said the initiatives form part of a unified strategy to foster innovation, strengthen cross-border financial integration, and bolster Europe’s financial sovereignty.
Why does it matter?
Project Agorá shows how central banks and financial institutions are testing tokenisation to modernise cross-border payments without moving outside regulated financial infrastructure. For Europe, the link to Pontes and Appia is especially important because it connects global experimentation with the Eurosystem’s own plans for DLT settlement, TARGET Services, financial integration, and financial sovereignty.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
Belarus has expanded the role of digital assets in its financial system by recognising cryptocurrencies, including Bitcoin, as underlying assets in non-deliverable over-the-counter financial instruments.
The decision, issued by the Council of Ministers and the National Bank of the Republic of Belarus, marks another step in the country’s effort to integrate digital tokens into regulated financial market activity.
The updated framework allows cryptocurrencies, alongside futures, interest rates, stock indices, and other reference assets, to be used in cash-settled contracts rather than through delivery of the underlying asset. Such instruments allow investors to gain exposure to price movements without directly holding the asset itself.
Authorities are positioning the change as a way to expand investment opportunities and deepen the use of digital assets within the wider economy. Belarus has already developed a broader regulatory framework for digital tokens, including rules covering crypto-related banking services, mining, trading, and token operations.
The move reflects a wider trend of bringing crypto exposure into conventional financial structures, rather than treating digital assets as entirely separate from regulated markets. However, the change is narrower than full integration of cryptocurrencies into the financial system, as it applies specifically to their use as reference assets in cash-settled OTC instruments.
Why does it matter?
Belarus’ decision shows how crypto assets are being incorporated into more traditional financial products through regulated exposure rather than direct ownership. The change could broaden access to crypto-linked instruments while keeping settlement within conventional financial channels. It also illustrates a broader regulatory trend in which digital assets are increasingly treated as reference assets for financial contracts, rather than solely as standalone tokens traded on crypto platforms.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
Central bank digital currencies (CBDCs) have rapidly become one of the most debated topics in global finance. The growing adoption of cryptocurrency, the expansion of stablecoins, and the broader digitalisation of payment systems have prompted governments and central banks to reconsider how state-issued money should function in the digital era. Supporters present CBDCs as a modern financial innovation while critics argue that they could increase state control over financial activity.
Unlike traditional debates surrounding cryptocurrencies, discussions about CBDCs extend beyond the technology alone. Questions surrounding privacy, financial sovereignty, surveillance, monetary policy, and the future role of governments in digital finance now sit at the centre of the global CBDC debate. As more jurisdictions move from research to pilot programmes and implementation, CBDCs are increasingly viewed as a response to the rise of crypto assets and a broader transformation of modern financial infrastructure.
image via Magnific
What are CBDCs?
A central bank digital currency is a digital form of fiat currency issued and controlled by a central bank. Unlike decentralised cryptocurrencies, CBDCs remain fully tied to state monetary systems and national currencies. Their value is supported by governments in much the same way as traditional currency.
Anti-crypto by design, CBDCs differ significantly from cryptocurrencies despite often using similar technological concepts. Decentralised digital assets such as Bitcoin operate without a central authority and rely on distributed blockchain networks, whereas CBDCs are centrally managed and regulated. In practice, CBDCs represent a digital state currency, not an alternative financial system.
Most CBDC models fall into two categories: retail CBDCs and wholesale CBDCs. Retail CBDCs are designed for public use in everyday transactions, while wholesale CBDCs focus on interbank settlements and institutional payments.
Central banks have accelerated CBDC research partly because digital payments increasingly dominate global commerce. The rapid growth of crypto markets and private stablecoins has also intensified discussions about whether states risk losing influence over monetary systems if digital finance evolves outside government control.
image via Magnific
Why governments support CBDCs
Governments and central banks generally present CBDCs as a financial modernisation tool. One of the most frequently cited advantages involves payment efficiency. CBDCs could potentially enable faster domestic transactions, reduce settlement delays, and lower the cost of cross-border payments. In economies where digital payments already dominate consumer behaviour, central banks increasingly argue that public money must evolve alongside technological change.
Another major factor behind CBDC development is monetary sovereignty. The rise of cryptocurrencies and privately issued stablecoins has raised concerns among policymakers that private digital assets could weaken the state’s influence over financial systems. From this perspective, CBDCs are viewed as a way to maintain central bank authority in an increasingly digital economy.
Supporters also argue that CBDCs could improve financial inclusion. In regions where large parts of the population remain outside of traditional banking systems, digital state-backed wallets could provide broader access to financial services without requiring conventional bank accounts.
Some policymakers also view CBDCs as a strategic response to growing geopolitical competition in financial technology. Digital currencies could eventually reshape international payment networks and reduce dependence on existing cross-border settlement systems. As a result, CBDCs are increasingly becoming part of broader discussions surrounding economic competitiveness and technological sovereignty.
image via Magnific
Why the crypto community opposes CBDCs
Opposition to CBDCs within the cryptocurrency community largely centres on concerns surrounding centralisation and state control. Many crypto advocates argue that CBDCs contradict the original philosophy behind decentralised cryptocurrencies, which were designed to operate independently of governments and central financial institutions. Moreover, CBDCs are seen as an attempt to imitate cryptocurrencies.
Privacy concerns remain one of the most significant criticisms. Critics fear that CBDCs could expand government visibility into personal financial activity, particularly if digital payment systems become directly connected to state-controlled infrastructure. Unlike cash transactions, which provide a degree of anonymity, CBDC transactions could potentially allow authorities to monitor spending patterns in real time.
Concerns about programmable money have also intensified debate. Some critics argue that CBDCs could theoretically enable restrictions on how, where, or when money is spent. Although many governments insist that such scenarios are speculative, the possibility of programmable financial controls has become a major talking point in the crypto industry.
Another argument frequently raised by crypto supporters involves financial autonomy. Decentralised cryptocurrencies allow users to self-custody assets without relying on banks or governments. CBDCs, by contrast, remain fully integrated into state-controlled financial systems. For many in the crypto sector, this distinction represents a fundamental ideological divide rather than merely a technological difference.
Critics also argue that CBDCs could increase pressure on decentralised cryptocurrencies through stricter regulatory frameworks. Some fear that governments could eventually favour state-backed digital currencies while imposing stricter compliance requirements on private crypto platforms and decentralised finance ecosystems.
image via Magnific
Global CBDC projects and implementation challenges
Several jurisdictions have already launched or tested CBDC initiatives, producing mixed results across different economic and political environments.
China remains one of the most advanced examples through its digital yuan project, also known as e-CNY. Chinese authorities have promoted CBDC for years as part of a broader effort to modernise payments and strengthen the country’s digital financial infrastructure. However, public adoption has reportedly remained relatively weak despite extensive state support and pilot programmes in major cities. Surveys have indicated that a large majority of respondents neither encountered nor used the digital currency, highlighting ongoing scepticism among consumers.
India has adopted a noticeably more cautious approach towards CBDC implementation through its e-rupee project. Since its launch in late 2022, adoption has remained limited despite various incentives designed to encourage usage. Indian authorities have repeatedly stressed that while CBDCs could improve trade settlements, remittances, and cross-border transactions, the long-term consequences for the banking system remain uncertain. Officials from the Reserve Bank of India have warned that CBDCs could potentially destabilise traditional financial institutions during periods of economic stress.
Russia has also accelerated the development of the digital rouble as part of its broader financial modernisation strategy. The digital rouble is expected to enter a phased public rollout in 2026, with pilot programmes already including government transfers, commercial payments, transport services, and real estate transactions. Russian authorities have recently announced the country’s first digital ruble salary payment, marking an important symbolic milestone for the project. Authorities have stated that future CBDC salary payments would remain optional for recipients. The Bank of Russia has described the project as one of the world’s most advanced CBDC initiatives and has highlighted smart contracts, budgetary payments, and cross-border settlements as key areas for future application.
In contrast, the United States has become one of the most politically divided jurisdictions regarding CBDCs. Debate surrounding a potential digital dollar has increasingly focused on privacy, civil liberties, and financial surveillance concerns. Several Republican lawmakers have pushed for permanent restrictions that would prevent the Federal Reserve from issuing or even testing a US CBDC. Compared to jurisdictions actively implementing CBDCs, the United States appears to be increasingly focused on limiting government involvement in digital currency systems rather than expanding it.
Meanwhile, the European Central Bank continues to develop the digital euro project. European policymakers have framed the project as part of a broader effort to preserve monetary sovereignty and reduce dependence on non-European payment providers in an increasingly digital economy. According to the ECB, the system is intended to combine the convenience of digital payments with certain characteristics traditionally associated with cash. However, privacy has become one of the most sensitive aspects of the European debate.
Collectively, these international examples demonstrate that CBDC implementation is not solely a technological challenge. Public trust, political culture, regulatory design, and perceptions of privacy and state control may ultimately prove to be as important as the underlying digital infrastructure itself.
image via Magnific
CBDCs and cryptocurrencies: competition or coexistence?
Despite the growing tension between the two models, CBDCs and cryptocurrencies may not necessarily become direct replacements for one another. Analysts argue that the two systems could coexist while serving different purposes within the broader digital economy.
CBDCs are primarily designed to preserve and modernise existing monetary systems, whereas cryptocurrencies often aim to provide alternatives outside of traditional financial structures. From that perspective, CBDCs may function as a regulated digital payment infrastructure while decentralised cryptocurrencies continue to attract users seeking autonomy, borderless transactions, or alternative stores of value.
Some observers also believe that CBDC development could indirectly accelerate digital asset adoption by familiarising the public with blockchain-related technologies, tokenised payments, and digital wallets. Greater public exposure to digital currencies may ultimately increase broader participation in digital finance in general.
At the same time, tensions between the two ecosystems are unlikely to disappear entirely. The debate over CBDCs increasingly reflects a broader conflict between institutional control and decentralised financial models. Questions surrounding privacy, regulation, and ownership of financial data are likely to remain central as digital currency systems continue to evolve.
image via Magnific
Rethinking money, trust, and sovereignty
Ultimately, the debate over CBDCs is not merely about payments or financial technology, but about the future relationship between citizens, money, and the state itself. Throughout modern history, money has represented more than just economic value alone- it has reflected trust, sovereignty, political power, and social stability. As finance becomes increasingly digital, governments and societies are now forced to reconsider the role that public money should play in an environment shaped by decentralised technologies, borderless transactions, and rapidly evolving digital economies.
CBDCs may therefore emerge as one of the defining financial experiments of the twenty-first century. Their long-term significance will likely depend not only on technological efficiency but also on whether central banks can preserve public confidence while adapting to a digital era that increasingly values autonomy, privacy, and financial flexibility. Excessive state control could intensify public resistance, while insufficient innovation may risk weakening the relevance of sovereign currencies in a global financial system increasingly influenced by private digital assets and decentralised networks.
Rather than representing a simple conflict between governments and cryptocurrency communities, the rise of CBDCs may ultimately signal the beginning of a broader transformation in how value, trust, and economic participation are understood in the digital age. The countries that succeed may not necessarily be those with the most advanced technology, but those capable of balancing innovation with civil liberties, monetary stability with openness, and financial modernisation with public trust.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
The updated rules were approved by the Ministry of Finance and incorporated into the national mining registry managed by the Federal Tax Service. Registered mining operators are now required to submit technical network information in addition to business registration details.
Access to the registry is limited to authorised government institutions, including tax authorities, courts, the central bank, and energy sector entities.
Officials said the information will support compliance monitoring, risk assessment, and enforcement activities, including identifying unregistered mining activity that continues outside the legal framework.
Operators that violate registry requirements or submit inaccurate information may face removal from the registry. The measures follow ongoing government concerns regarding illegal mining activity and pressure on energy infrastructure.
Why does it matter?
Russia’s tighter mining registry rules reflect a broader trend of governments increasing technical oversight of crypto infrastructure rather than relying only on traditional financial reporting. By linking mining activity to IP addresses and energy usage patterns, authorities are effectively moving towards a more granular, data-driven enforcement model.
Strengthened compliance tools may improve state control and transparency, but they also signal a shift toward deeper surveillance of digital asset infrastructure in regulated markets.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
Kenya’s Finance Bill 2026 proposes expanded tax reporting and compliance requirements for virtual asset service providers and digital payment platforms. According to the proposal, the measures are intended to strengthen oversight of digital financial activity and broaden the country’s tax base.
The bill would require virtual asset service providers to submit annual transaction and user activity reports to the Kenya Revenue Authority. The framework also includes provisions enabling information sharing with foreign tax authorities.
Additional measures would affect the broader digital payments sector, including taxation changes related to card transactions and selected fintech services. Analysts cited by KPMG Kenya said the reforms could increase compliance obligations for cryptocurrency firms and digital payment providers.
The proposal also expands enforcement powers available to the Kenya Revenue Authority during tax disputes. It also shortens filing deadlines and broadens disclosure obligations for businesses. The measures form part of broader efforts to modernise tax administration and improve revenue collection.
Why does it matter?
The proposed reforms signal a broader shift in how governments are adapting tax systems to the rapid expansion of digital finance and crypto markets. By formalising reporting obligations and increasing transaction-based taxation, Kenya is moving towards tighter integration of virtual asset activity within traditional fiscal frameworks.
At the same time, stronger enforcement powers and cross-border data sharing reflect a global trend towards greater regulatory coordination in digital assets. While this may improve transparency and revenue collection, it could also raise compliance costs and reshape how crypto platforms and fintech companies operate in emerging markets.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!
India’s Ministry of Electronics and Information Technology and the Indian School of Business have convened the Governance Summit 2026, focusing on inclusive AI under the country’s Viksit Bharat development vision.
The one-day summit, held on 23 May 2026 at the ISB Mohali Campus, was organised in collaboration with the Bharti Institute of Public Policy. The event focused on AI-powered approaches to digital commerce, online safety, healthcare, governance, job creation, and digital entrepreneurship.
MeitY Secretary S. Krishnan said AI offers India an opportunity to improve productivity, governance, and access across sectors, including healthcare, education, manufacturing, and financial inclusion. He also said India is positioned to use AI for inclusive growth, while acknowledging concerns about its impact on cognitive jobs.
The programme included four thematic panels on AI in digital commerce, online safety for women and children, healthcare access and affordability, and job creation and digital entrepreneurship. A parallel roundtable examined how AI could support last-mile public service delivery, from state governments to gram panchayats.
Ashwini Chhatre, Associate Professor and Executive Director at the Bharti Institute of Public Policy, said AI should be treated as a long-term national mission. He highlighted inequality, leapfrogging opportunities, and the future of jobs as key issues in India’s emerging AI landscape, and called for equitable access through safeguards, social security mechanisms, and affirmative action.
The summit brought together government officials, industry leaders, academics, and civil society representatives. Participants included Reliance Retail, Mastercard, Apollo Hospitals, IIT Madras, UNICEF India, Punjab Police, and central and state government ministries.
Why does it matter?
The summit reflects India’s effort to frame AI as part of a broader development and public service agenda, rather than solely as an industrial or innovation policy issue. Its focus on last-mile service delivery, online safety, healthcare access, jobs, and digital entrepreneurship points to the governance questions India will need to address as AI systems are deployed across public and economic sectors.
Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our Diplo chatbot!
