E-commerce and trade Archives | Digital Watch Observatory

Digital euro standards advance with European Central Bank support

The European Central Bank has signed agreements with the European Card Payment Cooperation, nexo standards, and the Berlin Group to support the future rollout of digital euro payments. Existing open technical standards will be reused to process transactions, to make implementation more accessible for payment service providers and merchants across Europe.

CPACE supports contactless payments, nexo standards help connect merchants with providers, while the Berlin Group supports account-based transactions using identifiers such as mobile numbers. Together, these standards are intended to create a more consistent technical environment for digital euro transactions across devices and platforms.

Reliance on open standards is designed to reduce costs and limit dependence on proprietary systems controlled by global card schemes and digital wallets. The ECB says this should help European payment providers expand beyond domestic markets without requiring major upgrades to point-of-sale infrastructure, while also improving interoperability and competition.

The final impact still depends on the adoption of the digital € regulation by the EU co-legislators, which the ECB says is necessary to unlock the initiative’s full potential and provide market actors with greater certainty for future investment.

Why does it matter?

Adoption of open standards by the European Central Bank reduces reliance on global payment providers and lowers costs for banks and merchants. Regulatory clarity on the digital euro would enable European solutions to scale across borders and strengthen control over the payments infrastructure.

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New Chinese rules restrict digital promotion of financial products

China has introduced new online marketing rules for financial products, further tightening its long-standing restrictions on cryptocurrency-related activity. The new framework limits the promotion of financial products to licensed entities and treats digital currency trading and issuance as illegal financial activity.

Issued by the People’s Bank of China and seven other regulators, the Administrative Measures for Online Marketing of Financial Products will take effect on 30 September 2026. The rules extend responsibility to platforms, intermediaries, and content creators who promote or facilitate financial products online.

Any assistance in promoting or facilitating prohibited financial activity may now be treated as participation in illegal finance, expanding enforcement beyond direct trading bans. In practice, that broadens the focus from financial products themselves to the wider digital promotion layer, including online displays, traffic generation, and other forms of internet-based marketing support.

Authorities say the measures are intended to protect consumers by limiting misleading or aggressive online promotion, including livestream marketing and viral investment content. In that sense, the rules are not only about crypto, but about tighter control over how financial products are marketed in digital environments.

The policy also reinforces China’s existing position, dating back to 2021, when regulators declared all cryptocurrency transactions illegal, while pushing enforcement deeper into the digital advertising and distribution layers of financial markets.

Why does it matter?

Stronger oversight of online financial promotion shows that crypto-related advertising is increasingly being treated as a regulatory risk category, not just a marketing issue. The Chinese move also points to a broader trend in which regulators are extending scrutiny beyond financial products themselves to the digital channels, influencers, and platforms that help distribute them.

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New whitepaper aims to streamline virtual asset oversight in Nigeria

A Pan-African industry body, the Virtual Asset Service Providers Association, has introduced Project Green-White-Green, a policy framework designed to bring virtual asset transactions more fully into Nigeria’s formal financial system.

The proposal targets regulatory inefficiencies while seeking to capture an estimated $92.1 billion in annual transaction activity currently operating with limited formal integration.

VASPA Executive Chair Franklin Peters, who also leads Boundlesspay, said the framework addresses overlapping mandates among the Securities and Exchange Commission, Central Bank of Nigeria, and Corporate Affairs Commission. The model proposes more coordinated supervision, alignment of foreign exchange standards, and identity verification through integration with the National Identity Management Commission.

The whitepaper also introduces an API-based system intended to automate VAT and capital gains tax collection at the point of transaction. The aim is to reduce administrative friction, improve compliance, and create clearer regulatory pathways for Web3 businesses operating in Nigeria.

Although designed for Nigeria, the framework is presented as scalable across other African markets. Its proponents argue that better regulatory coordination and more structured taxation could support wider economic goals, including stronger formalisation and improved public revenue collection.

Why does it matter?

The framework directly tackles regulatory fragmentation that has slowed crypto and Web3 development in Nigeria.

By aligning the roles of the Securities and Exchange Commission of Nigeria, the Central Bank of Nigeria, and the Corporate Affairs Commission of Nigeria, it aims to reduce legal uncertainty and create a clearer path for startups to operate formally.

It also introduces structured taxation and compliance mechanisms, which could improve state revenue collection while bringing virtual asset activity into the formal economy.

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Singapore proposes more tailored capital rules for crypto assets

Singapore’s central bank has launched a consultation on new capital rules for crypto-asset exposures, proposing a more differentiated approach than treating all blockchain-based assets as equally risky.

Under the draft framework, tokenised traditional assets and certain stablecoins would fall into a lower-risk category with lighter capital treatment. The proposal also leaves room for some assets on permissionless blockchains to qualify for that category if they meet principle-based risk conditions.

At the same time, the approach remains cautious. Singapore-incorporated banks would face strict exposure limits, including a cap of 2% of Tier 1 capital for qualifying crypto-asset exposures and a 5% Tier 1 capital limit for exposures that give rise to liabilities.

The consultation suggests Singapore is not trying to open the door widely to bank crypto activity, but rather to create a more workable prudential framework for selected forms of tokenised finance. That would allow regulators to distinguish between higher-risk crypto exposures and assets that more closely resemble traditional financial instruments in tokenised form.

The move is significant because it points to a more tailored interpretation of international prudential standards rather than a one-size-fits-all approach. If adopted, it could reduce uncertainty for banks seeking to engage with tokenised assets while preserving tight capital safeguards around the sector.

More broadly, the proposal reflects a cautious effort to integrate parts of the crypto and tokenisation market into mainstream finance without weakening the core logic of bank capital regulation. In that sense, the consultation is less a loosening of rules than an attempt to apply them with greater precision.

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Global stablecoin rule gaps raise concerns in Bank for International Settlements warning

The Bank for International Settlements has warned that diverging national approaches to stablecoin regulation could create openings for regulatory arbitrage as stablecoins become more closely linked to the traditional financial system.

In a recent bulletin, the BIS says the growth of stablecoins is creating policy challenges ranging from anti-money laundering and financial integrity to broader risks to financial stability. It argues that inconsistent regulatory treatment across jurisdictions could allow firms to exploit gaps between rulebooks, making supervision less effective and fragmenting cross-border financial activity.

The BIS also points to broader systemic concerns as stablecoins move closer to mainstream finance. Their expanding role could reshape how funds move through the financial system, with implications for bank funding, credit intermediation, and the transmission of stress during market volatility. Separate BIS research has also found that stablecoins are playing a growing role in safe asset markets, with implications for financial stability and monetary policy transmission.

One key concern is how stablecoin structures could behave under pressure. If large numbers of users redeem at once, issuers may need to liquidate reserve assets quickly, potentially transmitting stress into underlying markets.

The BIS bulletin frames these risks as part of a broader challenge: stablecoins are no longer crypto instruments operating in isolation, but are increasingly linked to core parts of the financial system.

The BIS also warns that regulation is made harder by the fact that many stablecoins circulate on public blockchains. In that environment, conventional controls such as anti-money laundering checks and identity verification are often weakest at the points where users move between crypto markets and traditional finance.

That is why the bulletin stresses the importance of stronger controls at entry and exit points, rather than relying only on rules aimed at issuers themselves.

For some jurisdictions, the concerns go beyond prudential supervision. The BIS says the wider use of foreign-currency-denominated stablecoins could raise concerns about monetary sovereignty and weaken existing foreign exchange controls. That risk is especially relevant in countries where domestic monetary and exchange rate frameworks are more exposed to external pressures.

The broader significance of the warning is that the BIS is pushing for more coordinated and tailored regulation at a moment when stablecoins are moving closer to mainstream use.

Its message is not that all stablecoins should be regulated identically, but that fragmented oversight could undermine policy effectiveness, increase systemic vulnerabilities, and make cross-border risks harder to contain.

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Illegal cryptocurrency circulation to carry prison sentences in Russia

Russia’s government commission on legislative activity has approved new measures introducing criminal liability for large-scale cryptocurrency operations conducted without the central bank’s authorisation.

The proposal establishes penalties for the illegal organisation of digital currency circulation where significant damage or substantial financial gain is involved.

Under the approved amendments, individuals found to be organising crypto transactions in violation of Russian law could face prison sentences of 4 to 7 years. The rules apply to cases involving harm to individuals, organisations, or the state, or large-scale illicit income.

The draft introduces a new Article 171.7 into the Russian Criminal Code, formally defining ‘illegal organisation of digital currency circulation’ as a punishable offence. The measures are expected to come into force on 1 July 2027, marking a significant tightening of enforcement in the country’s digital asset sector.

By introducing custodial penalties, Russia is raising the legal and financial risks for unlicensed digital asset activity, which could deter informal market participation and push activity towards regulated channels.

In the broader context, it reflects a global trend in which governments are moving to formalise oversight of crypto markets in response to concerns about financial crime, capital flows, and systemic risk.

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EU updates technology licensing competition rules to reflect data and digital markets

The European Commission has adopted revised rules governing technology transfer agreements (Technology Transfer Block Exemption Regulation and Guidelines on the application of Article 101 of the Treaty to technology transfer agreements), updating a framework originally introduced in 2014.

These changes aim to reflect developments in the digital economy, particularly the growing role of data and standardised technologies in enabling interoperability across markets.

Technology transfer agreements allow firms to license intellectual property such as patents, software and design rights, supporting the dissemination of innovation. While such agreements are often considered pro-competitive, they may also create risks if they restrict market access or distort competition.

The revised framework clarifies how these agreements are assessed under Article 101 of the Treaty on the Functioning of the European Union.

The updated rules introduce specific guidance on data licensing and licensing negotiation groups, addressing new market practices.

They also refine conditions under which agreements benefit from exemptions, including simplified criteria for early-stage technologies and clearer safeguards for technology pools linked to industry standards.

Overall, the revision by the EU seeks to improve legal certainty for businesses while ensuring that licensing practices support innovation, competition and the broader functioning of the single market. The new framework will apply from May 2026.

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ECB warns on liquidity pressures in digital fund structures

An analysis published by the European Central Bank highlights the rapid expansion of tokenised money market funds, while warning that familiar financial risks remain embedded in their structure.

Market size remains relatively small at around €7 billion, yet growth has accelerated, largely driven by activity in the digital asset ecosystem.

Hybrid design continues to define the sector. Fund shares are issued as blockchain-based tokens, but underlying assets and key operational processes often remain off-chain.

Such arrangements limit the efficiency gains associated with tokenisation, including continuous trading and real-time settlement, while maintaining reliance on traditional intermediaries and legal frameworks.

Potential advantages include faster settlement, improved transparency, and expanded use cases such as collateral in derivatives and repo transactions. Tokenised funds may also enhance liquidity access through peer-to-peer transfers and offer more precise, real-time yield calculations.

Realisation of these benefits, however, depends on deeper integration and more advanced infrastructure.

Financial stability risks remain a central concern in the ECB’s assessment. Liquidity mismatches between instantly tradable tokens and slower underlying assets may heighten the risk of investor runs during periods of stress.

Additional vulnerabilities arise from operational dependencies, smart contract risks, and growing interconnections between crypto markets and traditional finance. The overall impact will depend on regulatory responses and onhow effectively emerging risks are managed as the market evolves.

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Crypto gains official recognition in Argentina investor framework

Argentina’s securities regulator has officially recognised cryptocurrencies as part of an individual’s net worth when determining qualified investor status. The change is set out in CNV Resolution 1125/2026, which allows digital assets to be included in the financial threshold of roughly $479,000.

The measure defines virtual assets as transferable digital value, covering cryptocurrencies, tokenised assets, and stablecoins. Authorities stated that incorporating these assets reflects a broader view of financial capacity and aims to expand participation in investment markets.

A 2022 central bank ban still prevents banks from offering crypto services, though some institutions are testing blockchain-based settlement systems internally. The restriction is expected to ease as the government signals a more open stance towards digital assets.

The policy shift positions Argentina as gradually integrating crypto into its formal financial framework, with the potential to widen investor access and align regulation with evolving digital markets.

Financial systems are gradually adapting to digital assets, even in jurisdictions with strict restrictions, signalling a slow convergence between traditional banking infrastructure and blockchain-based settlement technologies.

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First Dutch credit institution enters crypto market under MiCA framework

ClearBank Europe has become the first Dutch credit institution to secure Crypto Asset Service Provider status under the EU’s Markets in Crypto-Assets Regulation. The Dutch Authority for the Financial Markets confirmed the approvalafter the bank completed its MiCAR notification on 9 April 2026.

The new status allows ClearBank to deliver regulated digital asset services across the European Union. The institution will use Circle’s Mint platform to provide clients with access to EURC, a euro-referenced stablecoin, and USDC, a US dollar-referenced stablecoin.

Under MiCA rules, the EU credit institutions can access a notification pathway distinct from the standard licensing regime for crypto service providers.

ClearBank becomes the first Dutch bank to complete the process, enabling seamless movement between fiat and digital assets within a regulated banking environment.

ClearBank operates under European Central Bank authorisation and is supervised by De Nederlandsche Bank. Its digital asset strategy, developed since gaining its banking licence in the Netherlands, is now advancing to its first large-scale implementation through MiCA compliance.

The development signals how the EU regulation is evolving to integrate traditional banking institutions into the crypto ecosystem, creating a more unified and compliant framework for digital asset adoption across financial markets.

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