A group of 12 Democratic US senators unveiled a crypto regulation plan, highlighting the need for bipartisan oversight. The proposal comes in response to Republicans’ plan to advance a market structure bill this month.
The Democrats’ framework outlines seven key pillars, including protections against illicit finance and measures to close gaps in the spot market for digital assets not classified as securities. It also calls for fair and effective regulation, highlighting concerns over the SEC, CFTC, and Treasury Department leadership.
The framework criticised Trump for removing Democratic commissioners and noted his family’s financial ties to crypto projects. Senators urged limits on elected officials and family members profiting from digital assets and reinforced disclosure requirements.
With the House passing the CLARITY Act and the GENIUS Act regulating stablecoins, the Senate is expected to prioritise crypto market structure legislation. However, Democrats remain uncertain whether Republicans will adopt their recommendations, with a final bill unlikely before 2026.
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Kazakhstan President Kassym-Jomart Tokayev has announced plans to establish a State Digital Asset Fund to consolidate the country’s position in digital finance. The fund will accumulate a strategic crypto reserve through the National Bank’s Investment Corporation.
Crypto adoption in Kazakhstan has surged, doubling ownership from 4% in 2022 to 8% in 2024. Mining generated over $10 million in taxes, while licensed providers contributed $367,000 in the first eight months 2024.
Tokayev warned of rising online fraud, highlighting the need for anti-fraud centres, biometric ID systems, and enhanced legislation to protect citizens and state finances. He connected digital finance to urban development, unveiling Alatau City, a $7.2 billion fully digitalised smart city with crypto payments.
The initiative positions Kazakhstan as a regional leader in crypto strategy, combining economic growth, technological innovation, and digital infrastructure development.
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Yevgeny Masharov, a member of the Public Chamber of the Russian Federation, said a national crypto bank would bring vast sums of crypto into the legal economy. He added that lawmakers also aim to ban quasi-legal exchanges while exploring the launch of state-run trading platforms.
Masharov suggested that a crypto bank could be a tool against online fraud, particularly schemes involving ‘droppers’ who launder cash and crypto for criminals. He argued that by keeping transactions within an official system, authorities would have more control over illicit flows.
The initiative follows similar moves in Belarus, where President Alexander Lukashenko has instructed officials to accelerate work on a national crypto bank. Moscow also views such a project as a way to support miners, enable safer cross-border payments, and reduce reliance on Western-controlled financial networks.
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Stablecoins have become central to the digital economy, with billions in daily transactions and stronger regulatory backing under the GENIUS Act. Yet experts warn that advances in quantum computing could undermine their very foundations.
Elliptic curve and RSA cryptography, widely used in stablecoin systems, are expected to be breakable once ‘Q-Day’ arrives. Quantum-equipped attackers could instantly derive private keys from public addresses, exposing entire networks to theft.
The immutability of blockchains makes upgrading cryptographic schemes especially challenging. Dormant wallets and legacy addresses may prove vulnerable, putting billions of dollars at risk if issuers fail to take action promptly.
Researchers highlight lattice-based and hash-based algorithms as viable ‘quantum-safe’ alternatives. Stablecoins built with crypto-agility, enabling seamless upgrades, will better adapt to new standards and avoid disruptive forks.
Regulators are also moving. NIST is finalising post-quantum cryptographic standards, and new rules will likely be established before 2030. Stablecoins that embed resilience today may set the global benchmark for digital trust in the quantum age.
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ScamSniffer has reported a sharp rise in phishing scams during August, with losses climbing to $12.17 million, a 72% increase from July. The figure marks the highest monthly losses this year and came alongside 15,230 victims, a new annual record.
The spike was driven mainly by EIP-7702 batch signature scams, which accounted for nearly half of the stolen funds. One victim lost $3.08 million in a single incident, while two others lost $1.54 million and $1 million, respectively.
More minor but significant losses also occurred, including users losing $235,977 and $66,000 in scams disguised as Uniswap swaps.
EIP-7702, introduced with Ethereum’s Pectra upgrade, allows externally owned accounts to act temporarily like smart contracts. While intended to improve user experience, it has opened the door to new phishing exploits.
Security experts warn that attackers increasingly use automated sweeper attacks to drain compromised wallets.
Beyond EIP-7702, traditional phishing methods remain a problem. ScamSniffer noted a rise in address poisoning and malicious ads on platforms such as Google and Bing. One user lost $636,559 after copying a tainted address, while two more lost $500,000 and $19,000 in similar schemes.
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Japan’s Financial Services Agency (FSA) has proposed moving cryptocurrency regulation under the Financial Instruments and Exchange Act (FIEA), which would align oversight with securities law and impose tougher rules on the industry.
The regulator noted crypto issues such as unclear disclosures, scams, unregistered operations, and exchange security weaknesses. Applying the Act could bring stricter disclosure requirements, regulation of brokerages, and enforcement tools such as emergency injunctions.
The report, though non-binding, highlights crypto’s growing role in Japan. Over 12 million exchange accounts have been opened, with deposits exceeding 5 trillion yen ($33.7bn).
Around 70 per cent of users are middle-income earners, and most expect long-term price gains. Finance Minister Katsunobu Kato recently acknowledged that cryptocurrencies could be part of diversified portfolios despite volatility risks.
If adopted, the proposed changes would reshape Japan’s regulatory landscape by treating crypto more like traditional financial instruments, aiming to reduce risks while strengthening investor confidence.
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The European Central Bank (ECB) has emphasised that its proposed digital euro will enhance Europe’s resilience against cyber threats and infrastructure disruptions while ensuring broad access to digital payments.
Piero Cipollone, a member of the ECB’s Executive Board, told the European Parliament that resilience and inclusiveness are central to the project. The digital euro is intended to complement physical cash, providing spare capacity alongside private payment systems.
Safeguards include multi-region transaction processing, a mandatory ECB-run app, and offline functionality to allow peer-to-peer payments during network or power outages.
The ECB also highlighted the importance of accessibility. Millions of Europeans with visual or hearing impairments or limited digital literacy could benefit from adaptive interfaces, voice commands, large-font displays, and mandatory support from payment providers.
Public institutions such as post offices and libraries may offer free assistance for those less familiar with digital tools.
Lawmakers received the ECB’s 14th update on the digital euro, underscoring the central bank’s commitment to combining security, inclusivity, and technological innovation in Europe’s evolving payments landscape.
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Coinbase CEO Brian Armstrong said AI now generates around 40 per cent of the exchange’s code, expected to surpass 50 per cent by October 2025. He emphasised that human oversight remains essential, as AI cannot be uniformly applied across all areas of the platform.
Armstrong confirmed that engineers were instructed to adopt AI development tools within a week, with those resisting the mandate dismissed. The move places Coinbase ahead of technology giants such as Microsoft and Google, which use AI for roughly 30 per cent of their code.
Security experts have raised concerns about the heavy reliance on AI. Industry figures warn that AI-generated code could contain bugs or miss critical context, posing risks for a platform holding over $420 billion in digital assets.
Larry Lyu called the strategy ‘a giant red flag’ for security-sensitive businesses.
Supporters argue that Coinbase’s approach is measured. Richard Wu of Tensor said AI could generate up to 90 per cent of high-quality code within five years if paired with thorough review and testing, similar to junior engineer errors.
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PayPal has partnered with Perplexity AI to provide PayPal and Venmo users in the US and select international markets with a free 12-month Perplexity Pro subscription and early access to the AI-powered Comet browser.
The $200 subscription allows unlimited queries, file uploads and advanced search features, while Comet offers natural language browsing to simplify complex tasks.
Industry analysts see the initiative as a way for PayPal to strengthen its position in fintech by integrating AI into everyday digital payments.
By linking accounts, users gain access to AI tools and cash back incentives and subscription management features, signalling a push toward what some describe as agentic commerce, where AI assistants guide financial and shopping decisions.
The deal also benefits Perplexity AI, a rising search and browser market challenger. Exposure to millions of PayPal customers could accelerate the adoption of its technology and provide valuable data for refining models.
Analysts suggest the partnership reflects a broader trend of payment platforms evolving into service hubs that combine transactions with AI-driven experiences.
While enthusiasm is high among early users, concerns remain about data privacy and regulatory scrutiny over AI integration in finance.
Market reaction has been positive, with PayPal shares edging upward following the announcement. Observers believe such alliances will shape the next phase of digital commerce, where payments, browsing, and AI capabilities converge.
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The Federal Reserve Board will hold a conference on payments innovation on 21 October, focusing on emerging technologies in US payment systems. Regulators, academics, and industry participants will explore ways to enhance the safety, efficiency, and accessibility of payments.
Panel discussions will cover stablecoins, tokenised assets, AI in payments, and the convergence of traditional and decentralised finance. The event highlights how digital assets are increasingly viewed alongside conventional payment methods, reflecting their growing role in financial systems.
The conference will be livestreamed on the Fed’s website, with further details forthcoming.
Experts emphasise the need for clear, unified rules to enable tokenised credit and liquidity markets to scale without fragmentation. Artificial intelligence is also moving into the core of payments, with applications in fraud detection, credit assessment, and risk management.
The Fed’s event adds to a busy Q4 policy calendar, alongside initiatives from the SEC, CFTC, BIS, and MAS. Officials stress that innovation in payments is a constant, with new technologies complementing existing systems rather than replacing them.
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