Cryptocurrencies Archives | Digital Watch Observatory

Russia tightens crypto mining oversight with new IP tracking rules

Russia has introduced additional oversight requirements for cryptocurrency mining operators, including mandatory disclosure of IP addresses associated with mining activity. According to officials, the measure is intended to improve transparency and support the identification of unregistered mining operations.

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.

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Kenya proposes new taxes on digital payments and fintech services

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.

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EU and Mexico strengthen cooperation against crypto-related money laundering

Mexico and the European Union have agreed to expand cooperation on addressing money laundering involving cryptocurrencies and digital assets. The announcement was made during the 8th EU-Mexico summit, where both sides also advanced discussions on a modernised trade agreement.

Officials highlighted concerns regarding the use of digital assets in cross-border illicit financial activities linked to organised crime. The discussions focused on improving coordination related to identifying and disrupting suspected illicit financial flows.

The cooperation forms part of broader EU-Mexico engagement covering trade, investment, security, and digital policy. Both parties said they intend to continue dialogue and cooperation on evolving financial crime risks linked to the digital economy.

Why does it matter?

The agreement reflects a broader shift towards coordinated international enforcement against crypto-enabled financial crime, where illicit flows are increasingly moving across multiple jurisdictions with limited friction.

Strengthened cooperation between major regions like the EU and Mexico is intended to reduce enforcement gaps that criminal networks have been able to exploit.

It also signals how digital assets are becoming a central focus in global security and trade diplomacy, not just financial regulation. By linking anti-money laundering efforts with wider economic and strategic agreements, both sides are treating crypto-related crime as part of the broader challenge of safeguarding the integrity of the digital financial system.

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German lawmakers reject proposal to increase crypto taxation

A proposal by Germany’s Green Party to revise taxation rules for cryptocurrency investments has failed to advance in the Bundestag’s Finance Committee. The proposal aimed to remove the existing tax exemption on gains from digital assets held for more than one year.

Under current rules, profits from cryptocurrencies such as Bitcoin and Ethereum remain tax-free if assets are held beyond 12 months. Supporters of the proposal argued that current crypto tax treatment differs from broader capital gains taxation rules.

The initiative received limited parliamentary support, with concerns raised about potential legal inconsistencies and implementation challenges. Other parties, including those in the governing coalition, raised concerns that the reform could introduce new legal inconsistencies and fail to resolve perceived loopholes in the existing system.

At the same time, Germany continues to expand oversight of digital asset markets through new EU reporting requirements under the DAC8 directive. New reporting obligations under the EU’s DAC8 directive require service providers to supply detailed transaction data to tax authorities. The measures are intended to improve transparency and reporting related to cryptocurrency transactions.

Why does it matter?

The vote reflects a broader policy tension in Germany over how far governments should go in tightening taxation on digital assets without discouraging investment and innovation in the sector. It also signals that, for now, regulators are prioritising transparency measures like DAC8 reporting over immediate increases in tax burdens on crypto holders.

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Europol concludes major operation targeting criminal assets and crypto laundering

Europol has concluded the third operational phase of Project A.S.S.E.T., an international initiative focused on criminal asset tracing and money laundering investigations.

The operational phase took place between 19 and 22 May 2026 at Europol headquarters in The Hague and involved law enforcement agencies from 31 countries. More than 40 law enforcement agencies participated, including Asset Recovery Offices, Financial Intelligence Units, and specialised anti-money laundering teams from 31 countries.

The initiative also involved cooperation with Eurojust, INTERPOL, the European Public Prosecutor’s Office, and private-sector financial and cryptocurrency partners.

According to Europol, investigators identified bank accounts, cryptocurrency wallets, companies, vehicles, and real estate assets allegedly linked to criminal activities. Authorities additionally located two suspected criminals, with one arrested through the European Network of Fugitive Active Search Teams.

Europol said the operation generated intelligence related to emerging money laundering techniques and cross-border financial structures associated with organised crime networks. Investigators also reported identifying operational patterns involving cryptocurrencies and international asset concealment practices.

The operation followed an earlier cryptocurrency-focused enforcement phase conducted in October 2025.

European Commissioner for Internal Affairs and Migration Magnus Brunner said online fraud and crypto-related crime have become increasingly significant revenue sources for organised criminal groups. Europol officials additionally emphasised that international cooperation and financial intelligence increasingly play a central role in disrupting organised crime ecosystems and recovering illicit proceeds.

Europol said investigations are ongoing and that the full value of identified assets remains under assessment. Follow-up investigations are continuing across participating jurisdictions.

Why does it matter?

The operation reflects growing international focus on financial intelligence, cryptocurrency tracing, and cross-border asset recovery as organised crime groups increasingly rely on digital financial infrastructures. Furthermore, it demonstrates how law enforcement agencies and private-sector financial actors are strengthening cooperation to combat money laundering, online fraud, and illicit cryptocurrency operations across multiple jurisdictions simultaneously.

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European banks create Qivalis to develop MiCAR-compliant euro stablecoin

A consortium of leading European banks has established Qivalis, an Amsterdam-based joint venture that plans to issue a regulated euro-denominated stablecoin under the EU’s MiCAR framework.

Qivalis is working towards authorisation and supervision by the Dutch Central Bank as an Electronic Money Institution. The project follows an earlier announcement in September 2025 that nine major banks had joined forces to develop a MiCAR-compliant issuer of a euro stablecoin. BNP Paribas later joined the consortium, expanding institutional participation.

The participating banks include Banca Sella, CaixaBank, Danske Bank, DekaBank, ING, KBC, Raiffeisen Bank International, SEB, UniCredit and BNP Paribas. The initiative is positioned as a banking-led effort to create a regulated euro stablecoin for digital payments and on-chain financial activity.

Governance arrangements have also been formalised. Jan-Oliver Sell has been appointed CEO, Floris Lugt will serve as CFO, and Sir Howard Davies has been named Chairman of the Supervisory Board. All appointments remain subject to regulatory approval.

Qivalis plans to launch the euro-denominated stablecoin in the second half of 2026, subject to regulatory approval. The stablecoin is designed to support 24/7 cross-border payments, programmable payments, supply-chain management and digital asset settlement, including tokenised assets and cryptocurrencies.

Project leaders framed the initiative as a way to strengthen Europe’s role in the digital economy while embedding regulatory compliance, financial stability and data protection standards into future digital money infrastructure.

Why does it matter?

Qivalis shows how stablecoin development is moving beyond crypto-native companies and into the regulated banking sector. A MiCAR-compliant euro stablecoin backed by major European banks could strengthen Europe’s position in digital payments, programmable finance and tokenised asset settlement, while offering a regulated alternative to dollar-dominated stablecoins. Its impact will depend on regulatory approval, market adoption and whether banks can make blockchain-based payment rails useful at scale.

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UK expands regulatory and infrastructure plans for digital finance

The Bank of England plans to publish draft rules for systemic stablecoins in June, as part of the UK’s broader digital asset regulatory framework.

Deputy Governor Sarah Breeden outlined the plans during the City Week conference in London.

According to officials, regulators are reviewing earlier proposals following industry feedback related to compliance and market impact. The proposals may include limits on overall stablecoin issuance and requirements for banks issuing stablecoins through separate legal entities.

Authorities are also considering branding requirements intended to distinguish stablecoins from insured bank deposits.

Breeden also referred to growing institutional interest in tokenised financial markets and distributed ledger-based settlement systems.

Several financial institutions, including HSBC, Euroclear, and London Stock Exchange Group, are expected to participate in the UK’s digital securities sandbox later this year.

Alongside private-sector initiatives, the Bank of England is also upgrading its Real-Time Gross Settlement infrastructure and exploring pilot projects involving tokenised government debt instruments. Authorities additionally aim to extend settlement operating hours toward near-continuous availability by the early 2030s.

Why does it matter?

The UK’s push to regulate stablecoins and support tokenized finance highlights how major economies are increasingly competing to become leading hubs for digital financial innovation.

Decisions taken by the Bank of England could influence how traditional banking, payments, and capital markets evolve globally as governments and institutions move toward blockchain-based financial infrastructure.

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European Commission opens consultation on crypto-assets regulation

The European Commission has launched a public consultation on the functioning of the EU’s Markets in Crypto-Assets Regulation, seeking feedback from stakeholders and the wider public as digital asset markets continue to evolve.

Implemented in 2024, MiCA established the EU’s harmonised regulatory framework for crypto-assets and related services. It covers crypto-assets, asset-referenced tokens, e-money tokens, stablecoins, their issuers and crypto-asset service providers operating across the bloc.

The Commission said crypto-asset markets and the wider policy landscape have continued to expand since MiCA was developed. It is assessing whether the current framework remains fit for purpose in light of market and international regulatory developments.

The consultation seeks feedback on MiCA’s main building blocks. It includes a public questionnaire for individuals and a targeted consultation covering more technical and legal questions for stakeholders such as digital asset issuers and service providers, financial institutions, technology providers, academia, think tanks, industry bodies, consumer organisations and the EU public authorities.

Feedback submissions are open until 31 August. The Commission said the responses will inform its future policy work on digital assets.

Why does it matter?

The consultation shows that crypto regulation is entering a more adaptive phase, in which policymakers are assessing whether existing rules can keep pace with evolving markets and international approaches. Any future adjustment to MiCA could affect stablecoin issuers, crypto service providers, investors and wider digital finance policy in the EU, while also influencing regulatory debates in other jurisdictions.

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PARITY Act pushes new US crypto tax relief framework

A bipartisan group of US lawmakers has introduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act, known as the PARITY Act, as Congress continues expanding its focus on cryptocurrency regulation and taxation.

Representatives Steven Horsford, Max Miller, Suzan DelBene and Mike Carey introduced the proposal on 19 May, calling for clearer and more practical tax standards for digital assets. Supporters say the bill is intended to provide clarity, consistency and guardrails for the taxation of digital asset activities.

The proposal would create a deemed-basis rule for regulated, dollar-pegged payment stablecoins, treating certain digital dollars used like cash as cash for tax purposes. Lawmakers say the measure is designed to reduce administrative burdens for the Internal Revenue Service, provide consumer relief in routine transactions and prevent misuse through trading or arbitrage activity.

The bill would also provide tax certainty for foreign investors trading on US digital asset platforms, extend securities-lending tax principles to qualifying digital asset loans and apply anti-abuse provisions such as wash-sale and constructive-sale rules to digital assets.

Additional provisions would align the tax treatment of professional digital asset dealers and active traders with existing securities markets by allowing a mark-to-market election. The bill would also address the ‘phantom income’ issue for miners and stakers by creating an election for when digital asset rewards are taxed, modernise charitable contribution rules for digital assets and clarify that passive protocol-level staking by investment funds is not a trade or business.

The measure arrives as Congress debates broader cryptocurrency legislation linked to market structure and stablecoin oversight, including the CLARITY Act. Together, the proposals show how US lawmakers are increasingly addressing digital assets through taxation, consumer protection, market integrity and financial regulation.

Why does it matter?

Crypto taxation remains one of the main barriers to wider digital asset use, especially for stablecoin payments, staking, lending and routine transactions. The PARITY Act would aim to make tax treatment more predictable while applying anti-abuse rules to digital assets that are more closely aligned with traditional financial markets. Its impact would depend on whether Congress can integrate tax reform with wider debates on stablecoins, market structure and investor protection.

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Japan backs blockchain and AI-based financial infrastructure proposal

Japan has approved a policy proposal focused on blockchain technology and AI within future financial infrastructure development. The proposal reflects broader efforts to integrate digital technologies into financial systems and economic operations.

According to the proposal, backed by the ruling Liberal Democratic Party and endorsed by the government’s Policy Council, the initiative envisions expanded use of automated and continuously operating digital financial systems.

The proposal, titled the ‘Next-generation AI & Onchain Finance Concept’, envisions a system that enables 24/7 digital commerce through blockchain networks, including those supporting cryptocurrencies such as Bitcoin. The proposal describes blockchain technology as a potential foundation for future financial infrastructure because of its verification and record-keeping features.

The strategy includes consideration of tokenised financial instruments, including tokenised stocks and yen-denominated stablecoins. The proposal also discusses possible tokenisation models linked to the Bank of Japan’s current account deposits.

The Financial Services Agency has been tasked with developing a five-year roadmap to encourage both public and private sector investment in the initiative. Policymakers said the initiative is intended to support financial innovation and the development of programmable financial services.

Why does it matter?

Japan’s move is a major shift in how a leading economy is attempting to merge traditional monetary systems with blockchain and AI, potentially setting a benchmark for other countries exploring programmable finance and tokenised assets.

It could accelerate competition among jurisdictions to define standards for digital financial infrastructure, influencing how central banks, regulators and markets approach the integration of crypto, tokenisation and automated financial systems.

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