E-commerce and trade

European Parliament calls for wider crypto regulation review

The European Parliament has adopted a policy position calling for a review of how emerging digital-asset activities should be regulated after the rollout of MiCA.

The report asks the European Commission to assess whether decentralised finance, staking, crypto lending and borrowing, NFTs and tokenised assets need clearer regulatory treatment.

The position does not amend MiCA or create immediate new obligations for crypto firms.

Instead, it signals Parliament’s view that the EU should examine activities that remain partly outside the current crypto-asset framework.

Lawmakers also warned that inconsistent national approaches could fragment the EU digital-asset market and weaken the single-market benefits of MiCA.

The report comes after MiCA’s transition period ended on 1 July 2026, requiring in-scope crypto-asset service providers to obtain authorisation to continue operating in the EU.

Parliament also takes a more supportive view of tokenisation and euro-denominated stablecoins, arguing that regulated digital assets could contribute to the competitiveness of the EU financial markets.

Any expansion of crypto regulation would require further Commission work and separate legislative steps.

Why does it matter?

The report points to the next phase of the EU crypto regulation after MiCA. DeFi, staking, crypto lending, NFTs and tokenised financial assets are increasingly important parts of the digital-asset market, but they do not all fit neatly inside MiCA’s current scope. A review could bring more legal certainty and consumer protection, but it could also raise compliance costs and shape Europe’s competitiveness in digital finance. The key issue is whether the EU can expand oversight without fragmenting innovation or creating divergent national rules.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

ESMA launches first crypto custody review under MiCA

The European Securities and Markets Authority has launched a Common Supervisory Action on the digital operational resilience of crypto-asset service providers, with a specific focus on custody services.

The exercise will assess the maturity of authorised CASPs’ digital operational resilience frameworks in relation to custody activities.

National competent authorities will conduct a risk-based review of a sample of authorised crypto-asset service providers.

The exercise will run from the second half of 2026 to the first half of 2027.

ESMA said the review will focus on risks linked to distributed ledger technology, including governance arrangements, key and storage management, transaction controls, incident detection and response, smart contract risks and dependencies on third-party providers.

The initiative reflects ESMA’s risk-based supervisory priorities, which identify both digital operational resilience and crypto-asset service providers as key risk areas.

The findings collected by national regulators will be consolidated into a final report and submitted to ESMA’s Board of Supervisors upon the exercise’s conclusion in the second half of 2027.

The action marks a shift from rule implementation towards coordinated supervision of crypto firms operating under the EU’s MiCA framework.

Why does it matter?

Crypto custody is a critical part of the digital-asset market because failures in private key management, storage, transaction controls or incident response can directly affect users’ assets. ESMA’s coordinated review shows that MiCA supervision is moving from authorisation towards testing how firms manage operational and technology risks in practice. It could also help align national supervisory approaches and reduce uneven standards across the EU crypto market.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

SEC advances Project Crypto to clarify digital asset rules

The US Securities and Exchange Commission is advancing its Project Crypto initiative as part of a broader effort to provide clearer rules for digital assets.

SEC Chair Paul Atkins has framed the initiative as a shift away from uncertainty over how federal securities laws apply to crypto assets and related transactions.

The agenda includes work on a token taxonomy anchored in the Howey investment-contract analysis, while recognising that not every crypto asset is itself a security.

In March 2026, the SEC issued an interpretation, joined by the Commodity Futures Trading Commission, clarifying the treatment of digital commodities, digital collectables, digital tools, stablecoins and digital securities.

The interpretation also addressed how non-security crypto assets may become subject to an investment contract and later cease to be subject to one.

It clarified the application of federal securities laws to airdrops, protocol mining, protocol staking and wrapping of non-security crypto assets.

Atkins has also directed SEC staff to develop proposals that could allow broker-dealers and alternative trading systems to offer crypto asset securities, non-security crypto assets, traditional securities, staking and lending services under a more efficient licensing structure.

The SEC says it will continue working with the CFTC, banking regulators and Congress as lawmakers consider a broader crypto market-structure framework.

Why does it matter?

Project Crypto signals a major shift in the SEC’s approach to digital assets, from enforcement-driven uncertainty towards taxonomy, interpretation and possible rulemaking. Clearer distinctions between securities, non-security crypto assets and tokenised securities could make it easier for firms to understand which rules apply. However, many elements remain dependent on future SEC action and congressional market-structure legislation, so the initiative should be treated as an evolving regulatory agenda rather than a completed framework.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

France enforces new EU crypto rules under MiCA

France has entered a new phase of crypto regulation as the transitional period between its national Pacte law framework and the EU’s Markets in Crypto-Assets (MiCA) Regulation has ended. Since 2 July 2026, crypto-asset service providers operating in France must comply with MiCA requirements and obtain authorisation to offer services across the European Union.

The Autorité des Marchés Financiers (AMF) has supported firms throughout the transition while reviewing MiCA authorisation applications. France has authorised 31 crypto-asset service providers, making it the EU’s second-largest jurisdiction for approved firms.

MiCA introduces stricter requirements on investor protection, security, market integrity and the custody of crypto-assets. The AMF will continue supervising authorised providers and assessing new applications.

The regulator will also work with the European Securities and Markets Authority (ESMA) and other national authorities to oversee the orderly withdrawal of firms that failed to obtain MiCA authorisation. It has urged investors to use only authorised crypto-asset service providers operating under the new European framework.

Why does it matter?

France’s transition marks another step in MiCA‘s move from legislation to implementation. As national transitional regimes end, crypto firms across the EU must comply with a single regulatory framework, replacing fragmented national approaches with common licensing and supervisory standards.

The new regime is also intended to strengthen consumer confidence by introducing harmonised rules on investor protection, market integrity and operational resilience. Its long-term success will depend on whether it can provide effective oversight while allowing compliant firms to innovate and compete across the EU’s single market.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

Belgium warns against unauthorised crypto platforms under MiCA

Belgium’s Financial Services and Markets Authority (FSMA) has added six crypto platforms to its warning list after finding that they are offering services in the country without the authorisation required under the EU’s Markets in Crypto-Assets (MiCA) framework.

The regulator identified Aurum Foundation, Bank Bit, Bithf Pro, Dxago, Global Dynamic Trade and ZeriaFunding as crypto-asset service providers operating without the required authorisation. The FSMA urged consumers to check its official register before using crypto platforms or transferring funds.

The warning comes shortly after the EU’s MiCA licensing deadline, as national regulators across the EU begin enforcing the bloc’s new crypto regulatory framework. Authorities are increasing scrutiny of crypto firms as they adapt to the new authorisation requirements.

MiCA is also prompting firms to reassess their regulatory strategies. Crypto exchange Binance recently withdrew its licence application in Greece while pursuing authorisation in another EU jurisdiction, illustrating how companies are adjusting to the new framework.

Why does it matter?

Belgium’s action illustrates that MiCA is entering its enforcement phase, with national regulators beginning to act against crypto firms that fail to obtain the necessary authorisations. The shift from adopting legislation to enforcing it is likely to reshape how crypto businesses operate across the EU.

The new framework also aims to strengthen consumer confidence by establishing common licensing standards throughout the single market. While stricter oversight may increase compliance costs for some firms, it could also encourage greater market stability and make it easier for authorised providers to operate across multiple EU member states.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

IMF warns policy choices will define tokenised finance future

The International Monetary Fund has warned that policy choices made today will shape whether tokenised finance strengthens or fragments the financial system.

In a new blog post, IMF Financial Counsellor Tobias Adrian said tokenisation should not be viewed only as a technological upgrade for faster settlement, cheaper payments and programmable assets.

When financial assets and liabilities move onto shared digital ledgers, processes that are currently sequential, including execution, clearing and settlement, can happen simultaneously through software.

The IMF said this could reduce costs, improve efficiency and enable new forms of programmable finance. However, it could also shift risks away from traditional financial institutions and towards platforms, service providers and market infrastructures.

Related IMF research highlights several possible settlement assets for tokenised finance, including tokenised bank deposits, stablecoins and tokenised central bank reserves.

Each model raises different policy questions around liquidity, financial stability, private-sector innovation and the role of public money.

The IMF said the long-term success of tokenisation depends on clear policy frameworks, safe settlement assets, robust governance of code, legal certainty and international coordination.

It also stressed that policymakers will need to address cybersecurity, interoperability and oversight of smart contracts as tokenised markets develop.

Why does it matter?

Tokenisation could change how financial assets are issued, transferred and settled, making finance faster and more programmable. Yet the IMF warns that efficiency gains alone do not guarantee stability. If tokenised markets develop across incompatible platforms, weak settlement assets or poorly governed smart contracts, the result could be fragmentation and new systemic risks. The policy challenge is therefore to build rules and infrastructure that support innovation while preserving trust, legal certainty and financial stability.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

Germany reviews crypto tax rules in 2027 budget plan

Germany’s federal government has listed a possible adjustment to cryptocurrency taxation among consolidation measures for its 2027 budget framework.

The Federal Ministry of Finance said the 2027 budget plan and financial framework to 2030 require further measures to address remaining fiscal pressures.

The measures listed by the ministry include efficiency reforms, changes to social spending, new levies on plastic and sugar, adjustments to alcohol and tobacco taxes, and stronger action against financial and tax crime.

The same list also refers to an adjustment of cryptocurrency taxation, without specifying the exact reform under consideration.

Germany currently applies favourable tax treatment to private crypto holdings in many cases. Profits from private disposals can be taxable if crypto assets are sold within one year, whereas gains from longer-term holdings are generally treated more favourably under existing rules.

Any change could therefore draw attention from investors and the crypto industry, particularly if it affects long-term holding exemptions.

The proposal remains at the budget-planning stage. The government said the relevant ministries must make agreed consolidation measures ready for inclusion in draft legislation before the 2027 federal budget is finalised.

Why does it matter?

Germany’s reference to crypto taxation in the 2027 budget framework signals that digital assets are becoming part of mainstream fiscal policy, not only financial regulation. A change to the country’s favourable tax treatment for private crypto holdings could affect investors, platforms and Germany’s position in Europe’s digital asset market. However, the policy impact cannot be assessed fully until the government specifies which tax rules it wants to change.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

UK FCA review warns agentic AI could reshape retail finance

A new FCA-commissioned review has warned that agentic AI could reshape retail financial services by allowing consumers to delegate more financial decisions to autonomous tools.

The Mills Review examines how AI could transform retail finance by 2030 and beyond, including banking, payments, savings, investments, insurance and debt advice.

The review says AI is moving financial services from human-led and episodic activity towards services that are AI-enabled, continuous and delegated.

Over time, AI agents could help consumers manage finances, compare products, execute tasks and optimise financial choices within agreed limits.

The report says the shift could help address long-standing market problems, including advice gaps, low switching, financial exclusion and poor savings outcomes.

It also warns that greater autonomy will create new risks around consent, accountability, redress, market power, cyber threats and financial crime.

The review recommends that the FCA consider developing trusted frameworks for AI agent participation in financial services, including clearer expectations for identity, consent, control and liability.

It also calls for stronger AI-enabled supervision so the FCA can detect risks across firms, shared models, cloud platforms and data sources more quickly.

The report says human accountability must remain central, with firms remaining responsible for outcomes produced by AI systems.

Why does it matter?

The review points to a shift from AI as a financial services support tool to AI as an active participant in consumer finance. If agents begin comparing products, moving money, managing portfolios or taking out insurance within delegated limits, regulators will need clearer rules on consent, liability, identity, redress and oversight. The report also raises a broader infrastructure question: agentic finance will depend not only on AI models, but also on trusted data access, digital identity, payments systems and supervisory tools that can detect risks across the market.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

UAE Central Bank approves dirham stablecoin for retail use

The UAE Central Bank has issued a No Objection Certificate allowing the dirham-backed stablecoin DDSC to go live on selected exchange platforms regulated by Dubai’s Virtual Assets Regulatory Authority.

DDSC was developed through a collaboration between International Holding Company, First Abu Dhabi Bank and Sirius International Holding. The stablecoin is pegged 1:1 to the UAE dirham and operates on ADI Chain, an institutional Layer-2 blockchain.

The latest clearance follows earlier Central Bank approval for the launch of DDSC, announced in February 2026. The new no-objection certificate allows the stablecoin to partner with selected VARA-regulated exchange platforms.

The regulatory structure reflects the UAE’s dual-layer approach to digital assets. The Central Bank oversees payment tokens and monetary stability requirements, while VARA licenses and supervises virtual asset platforms in Dubai.

DDSC is designed to support digital payments, including peer-to-peer transfers, merchant payments and supplier settlements in dirhams.

The project has already been tested in institutional transactions, including a reported AED 110 million transfer on ADI Chain.

The approval marks another step in the UAE’s effort to build a regulated dirham-denominated digital payment infrastructure.

Why does it matter?

The DDSC approval demonstrates that the UAE is establishing a regulatory framework for stablecoins tied to its national currency. Central Bank clearance combined with VARA-regulated exchange access could make dirham-backed tokens more usable in payments, settlement and digital asset markets. The case also highlights a broader regulatory model in which monetary authorities oversee the approval of payment tokens, while specialised virtual asset regulators supervise exchange platforms.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

South Africa releases draft crypto tax guide

The South African Revenue Service has released draft guidance on how crypto assets should be taxed under existing income tax and capital gains tax rules.

The Draft Guide to the Taxation of Crypto Assets is open for public comment until 31 August 2026. It provides guidance on tax consequences that may arise when taxpayers hold or transact in crypto assets.

SARS treats crypto assets as intangible assets rather than currency. The draft guide says taxpayers must apply normal tax rules to determine whether amounts received or accrued from crypto transactions are revenue or capital in nature.

Tax treatment will depend on the facts of each case, including the taxpayer’s intention, the nature of the transaction and whether the asset is held as trading stock or on capital account.

The guide covers activities such as selling crypto assets for fiat currency, swapping one crypto asset for another, using crypto assets to pay for goods or services, mining, staking, decentralised finance, airdrops and hard forks.

The draft also notes that South Africa has implemented the Crypto-Asset Reporting Framework, requiring reporting crypto-asset service providers to collect and report transaction data to SARS.

SARS said the guide is foundational and not a binding general ruling, meaning taxpayers should still consider the specific characteristics of each crypto asset and transaction.

Why does it matter?

The draft guide gives taxpayers and crypto service providers clearer expectations on how South Africa’s existing tax system applies to digital assets. Treating crypto as intangible property rather than currency means trading, staking, mining, swaps and payments can create income tax or capital gains tax consequences depending on the circumstances. CARF reporting also increases tax authority visibility over crypto transactions, moving enforcement towards data-driven oversight and making non-disclosure harder.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

Diplo chatbot can make mistakes. Consider checking important information.