Cryptocurrencies

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.

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The South African Revenue Service has released draft guidance on how crypto assets should be taxed under existing income tax and capital gains tax rules.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

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UK finalises crypto regime with lower stablecoin capital coefficient

The UK Financial Conduct Authority has finalised key parts of its new cryptoasset regime, which will bring a broad range of crypto firms into full FCA authorisation from 25 October 2027.

The regime will apply to firms carrying out regulated cryptoasset activities, including trading platforms, intermediaries, custodians, stablecoin issuers and firms arranging staking.

As part of the package, the FCA has reduced the stablecoin issuance capital requirement coefficient from 2% to 1%. The regulator said the change makes the prudential framework more proportionate for larger issuers while maintaining the robustness of the overall regime.

The FCA said the new framework moves the UK beyond the anti-money laundering and financial promotions standards that previously defined its role in crypto markets.

The policy package includes final rules and guidance on stablecoin issuance, regulated cryptoasset activities, admissions and disclosures, market abuse, prudential requirements and the application of the FCA Handbook.

Under the stablecoin rules, non-systemic UK-issued qualifying stablecoins will be subject to requirements covering issuance, backing assets, redemption, safeguarding and disclosures.

Firms will be able to apply for authorisation between 30 September 2026 and 28 February 2027, ahead of the mandatory regime taking effect in October 2027.

Why does it matter?

The FCA’s policy package marks a major shift from limited crypto oversight towards a full authorisation-based regime. For stablecoin issuers, the reduction of the K-SII coefficient from 2% to 1% shows the regulator responding to industry concerns about proportionality and competitiveness while keeping baseline prudential safeguards. The wider regime could give firms clearer rules for operating in the UK, but it will also raise compliance expectations for platforms, custodians, intermediaries and staking providers.

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Russian draft law includes 48-hour crypto cooling-off rule

Russian lawmakers are considering a 48-hour cooling-off period for certain cryptocurrency transfers as part of a draft law on digital currencies and digital rights.

The measure would apply to non-qualified investors and is intended to protect users from fraud, according to comments from Vladimir Chistyukhin, First Deputy Governor of the Bank of Russia.

Chistyukhin said the cooling-off period would not apply to cryptocurrency trading itself. He clarified that the mechanism is intended for transfers to other accounts and similar operations, rather than brokerage activity.

The proposal forms part of a broader legislative effort to establish a legal framework for the circulation of cryptocurrencies in Russia. The State Duma adopted the government-backed draft law in its first reading in April.

Russian officials have framed the cooling-off mechanism as a targeted investor-protection tool rather than a broader restriction on market activity.

The proposal reflects a regulatory approach focused on reducing fraud risks while allowing parts of the crypto market to operate under a more formal legal framework.

Why does it matter?

The proposal shows how crypto regulation is moving beyond general warnings and enforcement actions towards safeguards built into transaction flows. A cooling-off period can slow down transfers linked to fraud, giving users and intermediaries more time to detect suspicious activity. The narrow scope is also important: by excluding trading and brokerage activities, Russian regulators aim to reduce consumer harm without directly limiting market liquidity or day-to-day trading.

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Mauritius unveils fintech strategy to boost digital finance growth

Mauritius has launched its National Fintech Strategy 2026–2030, a roadmap aimed at strengthening digital finance, innovation and financial inclusion.

The strategy was developed by the Ministry of Financial Services and Economic Planning with technical support from the UN Economic Commission for Africa and input from public and private-sector stakeholders.

The government says the strategy is intended to position Mauritius as Africa’s trusted fintech hub while supporting sustainable growth and the wider digital transformation of financial services.

The roadmap focuses on six areas: regulation and innovation, digital infrastructure and cybersecurity, skills development, market growth, international cooperation and consumer protection.

Implementation will run until 2030 and will be overseen through a dedicated governance framework. Planned targets include shorter licensing approval times, expanded digital onboarding, stronger digital infrastructure and training more than 5,000 people each year in specialised fintech skills.

Officials said the strategy responds to the growing role of digital technologies in finance, including digital payments, digital assets, regulatory technology and cross-border financial services.

UNECA said the initiative could support fintech development in Mauritius and offer lessons for other African countries seeking to build more inclusive and competitive digital finance ecosystems.

Why does it matter?

Mauritius’ strategy reflects a wider African policy trend: governments are trying to move fintech from fragmented innovation into structured national development plans. Stronger digital finance ecosystems can expand access to financial services, support small businesses, improve cross-border commerce and attract investment. The focus on cybersecurity, consumer protection and skills also shows that fintech growth depends not only on new products, but on trust, regulation and institutional capacity.

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New UK regime targets systemic stablecoin issuers

The Bank of England and the Financial Conduct Authority have set out how they will jointly regulate stablecoin issuers whose activities could pose risks to UK financial stability.

The joint approach forms part of the UK’s emerging stablecoin regime. Under the planned framework, the FCA will regulate UK-issued qualifying stablecoins, while issuers recognised as systemic by HM Treasury will also be subject to Bank of England oversight.

The authorities said the two-part regime is intended to provide clarity for firms while supporting innovation, consumer protection, market integrity and financial stability.

Stablecoin issuers may become systemic if their coins are widely used in payments and could create risks for the UK financial system. In those cases, the Bank would supervise prudential and financial-stability risks, while the FCA would continue to oversee consumer protection, competition and market integrity issues.

The framework includes transition arrangements for firms moving from FCA-only supervision to joint regulation. The Bank and FCA said this should help issuers scale without facing conflicting or duplicative requirements.

The approach also allows for issuers to be recognised as ‘systemic at launch’ where they are not yet operating at systemic scale but are likely to do so. Such firms could enter a phased supervisory pathway while meeting both FCA and Bank requirements.

The Bank is separately consulting on draft rules for sterling-denominated systemic stablecoin issuers. It intends to finalise its Code of Practice by the end of 2026, with regulated stablecoins expected to operate in the UK from 2027.

Why does it matter?

The UK framework is important because it creates a pathway for stablecoins to move from crypto-market products towards regulated payment instruments. By scaling supervision as issuers grow, the UK aims to support innovation without allowing systemically important stablecoins to develop outside financial stability oversight. The model could influence how other jurisdictions regulate digital money, especially where stablecoins are expected to support retail payments, wholesale settlement or cross-border transactions.

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AUSTRAC warns AI is reshaping financial crime

AUSTRAC has released a new suite of intelligence and risk assessments examining evolving threats, related to money laundering, terrorism financing and proliferation financing.

The Australian financial intelligence agency said advances in AI and other emerging technologies are enabling criminals to exploit vulnerabilities and evade detection. The reports are intended to help organisations strengthen risk-based anti-money laundering and counter-terrorism financing controls.

The package includes the Money laundering update 2026, Terrorism Financing Update 2026, Proliferation Financing Update 2026 and a report on terrorism financing risks in Australia’s non-profit sector. AUSTRAC said the publications show growing reliance on everyday financial services and corporate structures to conceal illicit funds.

While traditional risk channels remain relevant, AUSTRAC said financial crime is becoming more complex and interconnected as technology, globalisation and increasingly sophisticated criminal methods reshape how illicit activity is concealed.

AUSTRAC identified AI and virtual assets, including cryptocurrency, as key technologies reshaping the threat landscape by increasing both the scale and sophistication of financial crime.

The agency said legitimate financial services, trade flows, corporate structures and routine transactions can all be exploited to disguise illicit activity. It also highlighted persistent vulnerabilities in Australia’s non-profit sector, noting that although the overall terrorism financing risk remains stable, charities and not-for-profit organisations continue to face exposure to money laundering and terrorism financing.

Charities and not-for-profit organisations play an important role in supporting communities in Australia and overseas. However, AUSTRAC said they remain vulnerable to money laundering and terrorism financing.

AUSTRAC said the intelligence products are designed to help regulated organisations better understand emerging financial crime threats and strengthen their anti-money laundering and counter-terrorism financing controls.

Why does it matter?

Financial crime is becoming increasingly difficult to detect as criminal networks exploit legitimate financial systems alongside AI, cryptocurrencies and other emerging technologies. AUSTRAC’s latest assessments highlight the need for regulated organisations to strengthen risk-based anti-money laundering and counter-terrorism financing controls in response to a more complex threat environment.

The reports also underscore a broader shift in financial crime prevention. Rather than focusing only on traditionally high-risk transactions, organisations are being encouraged to monitor how ordinary financial services, corporate structures and cross-border activities can be misused, reflecting the growing sophistication of modern illicit finance.

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Central Bank of Azerbaijan submits draft crypto law for review

Azerbaijan has moved closer to regulating its cryptocurrency sector after the Central Bank completed a draft law on virtual assets and crypto markets and submitted it to state authorities for review.

Fidan Tofidi, Director of the Central Bank’s Financial Technologies and Innovations Department, said the legislation could be adopted before the end of the year. She described the framework as a major step for a sector that has so far remained unregulated in the country.

The proposed regime is expected to introduce licensing and supervision for virtual asset service providers operating in Azerbaijan. Regulators have previously said the framework should cover virtual asset markets and the activities of companies providing crypto-related services.

The initiative is part of Azerbaijan’s broader financial-sector development agenda, which includes work on virtual assets, shared know-your-customer mechanisms, supervisory technology and digital financial infrastructure.

Earlier Central Bank discussions on virtual assets focused on regulatory and supervisory approaches, market risks and opportunities, and the experience of countries such as Kazakhstan and Türkiye.

Azerbaijan has also tested crypto-related projects through its regulatory sandbox. One pilot involved a platform for buying, selling, exchanging and storing virtual assets, although the project was suspended after failing to achieve expected test results.

The Central Bank has maintained a cautious stance on a possible central bank digital currency, saying it is monitoring international developments before moving forward.

Why does it matter?

Azerbaijan’s draft law signals a shift from a legal grey area towards formal oversight of crypto markets and virtual asset service providers. Licensing and supervision could give regulators more visibility over market activity, strengthen consumer protection and help address money-laundering and terrorism-financing risks. The move also reflects a wider trend among emerging markets: rather than banning crypto outright, authorities are building frameworks to integrate digital assets into regulated financial systems.

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US SEC reviews framework for crypto and other novel ETFs

The US Securities and Exchange Commission has opened a public consultation on how it should treat exchange-traded funds that invest in innovative asset classes or use novel investment strategies.

The request for comment focuses on so-called Novel ETFs and asks whether existing regulatory tools remain appropriate as the ETF market expands beyond traditional products.

The SEC said examples of Novel ETFs include funds linked to crypto assets, commodity-focused instruments, single-stock strategies, heightened leverage, blockchain-enabled opportunities, private assets and event contracts.

The consultation asks whether such products raise questions about investment company status, ETF listing standards, investor protection, market surveillance, arbitrage mechanisms and registration procedures.

The review comes after rapid growth in the ETF market. The SEC said total ETF net assets increased from more than $4 trillion at the end of 2019 to more than $12 trillion at the end of 2025, while the number of ETFs rose from almost 1,900 to more than 4,600.

The regulator is seeking feedback from funds, advisers, investors and other market participants on whether further action is needed to support innovation while protecting investors and maintaining fair, orderly and efficient markets.

Why does it matter?

The SEC consultation shows how regulators are reassessing ETF rules as products move into more complex and politically sensitive areas, including crypto assets and event-based instruments. Clearer rules could help issuers understand when a product can use existing ETF registration and listing pathways. At the same time, the review reflects concern that faster product launches should not weaken investor protection, market surveillance or the functioning of ETF arbitrage mechanisms.

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Australia’s ASIC extends digital asset licensing relief

Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has extended its sector-wide no-action position for digital asset businesses until 30 September 2026, giving firms more time to apply for or vary an Australian Financial Services (AFS) licence. The extension is designed to support a smoother transition into the country’s evolving regulatory framework for digital assets.

The updated position also broadens the scope of relief to cover businesses operating under authorised representative arrangements or intermediary authorisations linked to AFS licence holders. ASIC said the changes are intended to provide greater regulatory certainty while maintaining investor protection and market integrity during the transition.

The extended timeline also applies to applications for Australian Market Licences and Clearing and Settlement facility licences. Firms must notify ASIC of their intention to apply and participate in a pre-application meeting before submitting an application.

ASIC said it has received around 30 licence applications since updating its guidance on digital assets and financial products in October 2025. According to the regulator, extending the no-action position gives firms additional time to adapt to Australia’s evolving Digital Asset Framework and clarified legal requirements.

Why does it matter?

The extension provides digital asset businesses with additional time to adapt to Australia’s evolving regulatory framework without disrupting existing operations. By pairing temporary regulatory flexibility with a clear licensing pathway, ASIC is seeking to encourage compliance while maintaining investor protection and market integrity.

The move also reflects a broader international trend in digital asset regulation. Rather than imposing immediate, sweeping requirements, regulators are increasingly using phased implementation and transitional relief to bring crypto businesses into established financial regulatory frameworks while reducing uncertainty for market participants.

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