Cryptocurrencies Archives | Page 2 of 170 | Digital Watch Observatory

UK moves closer to full crypto regime with FCA consultation

The UK Financial Conduct Authority (FCA) has launched a consultation on guidance for the country’s upcoming crypto regulatory regime, marking another step towards a full framework expected to take effect in October 2027.

The consultation covers key areas including stablecoins, trading platforms, custody and staking, as regulators seek to shape how firms will operate under the new system.

The FCA said the guidance is intended to help firms understand how future requirements will apply and to support the development of a ‘competitive and sustainable’ crypto sector.

Industry feedback is being invited until June 2026, with companies able to begin applying for authorisation from September 2026, ahead of the regime’s full implementation.

Further consultations have already been issued since late 2025, covering market abuse, prudential standards, and operational requirements for crypto firms.

Under the proposed system, all crypto service providers will need authorisation under the Financial Services and Markets Act, with existing registrations not automatically carrying over.

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

Crypto banking ban ends in Pakistan as regulated market access opens

Pakistan has lifted its eight-year ban on crypto-related banking activity by allowing financial institutions to work with licensed virtual asset providers.

The State Bank of Pakistan (SBP) issued a circular on 14 April authorising regulated banks to open accounts for entities registered under the Pakistan Virtual Assets Regulatory Authority (PVARA), following the passage of the Virtual Assets Act 2026.

The new framework permits banks to provide access to the sector but bars them from using their own capital or customer deposits to trade, hold, or invest in digital assets.

To reduce risk, institutions must use segregated Client Money Accounts to prevent the mixing of operational and client funds, while also complying with foreign exchange, anti-money laundering, and counter-terrorism financing rules.

Banks are required to conduct thorough due diligence on licensed providers, including verifying regulatory status and monitoring activity.

Any suspicious transactions must be reported to the Financial Monitoring Unit, and financial institutions are expected to adjust internal risk models to reflect the volatility of digital assets.

The regulatory shift follows consultations with global industry players and aims to attract compliant trading platforms to Pakistan’s large crypto user base. Authorities are also exploring blockchain-based infrastructure and stablecoin use cases for improving cross-border payments.

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

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.

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

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.

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

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.

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

FBI reports billions lost to crypto and AI scams

The Federal Bureau of Investigation reports that cyber-enabled crimes cost Americans nearly $21 billion in 2025, according to its latest Internet Crime Report. The Internet Crime Complaint Center recorded more than 1 million complaints, marking a rise from the previous year.

Investment fraud, phishing, extortion, and tech support scams remained the most common threats, with older adults reporting disproportionately high losses. Individuals over 60 accounted for approximately $7.7 billion in losses, reflecting a sharp year-on-year increase.

Cryptocurrency-related fraud was the most financially damaging category, with losses exceeding $11 billion across more than 180,000 complaints. The report also highlighted emerging risks linked to AI, including deepfake identities, voice cloning, and fabricated media used to manipulate victims.

The FBI has expanded initiatives such as Operation Level Up to identify ongoing scams and reduce losses, while emphasising early reporting and awareness measures. Officials say scammers increasingly use psychological pressure and realistic digital impersonation to deceive victims.

Rising losses highlight how rapidly evolving digital fraud techniques are outpacing public awareness, with crypto and AI tools making scams more scalable and convincing.

Strengthening detection, reporting, and education will be critical to reducing financial harm and improving resilience against increasingly sophisticated online crime networks.

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

China pushes blockchain adoption in banking sector

The State Administration of Taxation and the National Financial Regulatory Administration of China have called on banks to integrate blockchain and privacy computing into lending systems, aiming to improve transparency and expand access to financing for small businesses.

The initiative focuses on upgrading the ‘bank-tax interaction’ model by strengthening data sharing between financial institutions, tax authorities, and enterprises.

Authorities emphasise the need to standardise data exchange and reduce information asymmetry, which has long limited credit access for smaller firms. Improved credit models and faster approvals aim to support compliant businesses while boosting financial efficiency.

The directive aligns with China’s broader strategy to build a national data infrastructure supported by blockchain technology. A roadmap led by the National Development and Reform Commission targets nationwide implementation by 2029, with projected annual investment reaching 400 billion yuan.

Despite strict restrictions on cryptocurrency trading, China continues to promote blockchain as a core technology for economic development. Earlier initiatives, including blockchain invoicing, show a steady push to integrate the technology into real-world finance and administration.

Strengthening data sharing and transparency in lending could improve access to finance for small businesses, which remain a key driver of economic growth.

Wider blockchain integration may also support more efficient financial systems, reinforce trust in institutional processes, and advance China’s long-term digital infrastructure strategy.

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

Experts warn of potential quantum disruption to blockchain security

A survey by the Global Risk Institute has highlighted growing concern that quantum computing could undermine the cryptographic foundations of cryptocurrencies within the next decade.

Experts estimate a 28% to 49% probability that quantum machines capable of breaking current encryption standards could emerge within 10 years, with the probability rising further over a 15-year horizon.

Cryptocurrencies such as Bitcoin rely on public-key cryptography to secure transactions and verify ownership. Advanced quantum algorithms could reverse-engineer private keys from public data, exposing wallets and weakening blockchain security.

The risk is seen as particularly relevant for long-term stored assets and static addresses. Industry researchers and technology firms are already exploring post-quantum cryptography to mitigate potential disruption.

Efforts led by standards bodies such as the National Institute of Standards and Technology focus on developing encryption methods resistant to both classical and quantum attacks, although full migration across decentralised systems remains complex.

The findings place quantum readiness alongside broader digital security priorities, as financial systems, communications networks, and public infrastructure share similar cryptographic dependencies.

The evolving timeline is prompting early-stage preparation across the cryptocurrency ecosystem, where system upgrades must balance security, decentralisation, and continuity.

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

Employee interest grows in crypto payroll options

A survey conducted by Oobit among 1,004 full-time employees indicates growing interest in receiving salaries in cryptocurrency, reflecting a gradual shift in how workers view digital assets as part of everyday income.

Around 43% of respondents said they would be interested in receiving at least part of their pay in crypto, while 32% stated they would likely opt in if their employer introduced such an option. Interest was notably stronger among employees with prior crypto ownership or trading experience.

Adoption is already visible, with one in five workers having been paid in crypto, mainly through freelance or side work. Despite this, employer-led crypto payroll remains limited, with only 7% of employees saying their company currently offers it.

Concerns remain a key factor slowing wider uptake, particularly price volatility, cited by half of respondents. Barriers include preference for traditional currency, limited usability, and trust concerns, while clearer regulation and easier conversion tools could improve confidence.

Crypto compensation reflects a broader shift in how labour and value are being redefined within increasingly digital economies. Its gradual integration into payroll systems signals a move towards more flexible, borderless financial structures in which traditional and digital assets coexist.

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

IMF warns of rising risks in tokenised financial systems

The International Monetary Fund has warned that central banks could struggle to keep pace as tokenisation reshapes financial systems. Converting traditional assets into blockchain-based tokens is seen as a structural shift, improving efficiency while introducing new systemic risks.

According to the IMF, faster settlement and automation may reduce risks but also shorten reaction times during market stress. Instant transactions could trigger rapid margin calls and capital movements, limiting the ability of regulators to intervene effectively in emerging crises.

Tobias Adrian, Financial Counsellor of the International Monetary Fund and Head of their Monetary and Capital Markets Department, emphasised that tokenisation is transforming how financial products are issued, traded, and managed.

Concerns include unpredictable capital flows, faster currency shifts, and pressure on monetary sovereignty. Authorities are encouraged to replace legacy regulatory frameworks with more flexible systems capable of monitoring liquidity and leverage in real time.

Large institutions such as BlackRock, JPMorgan Chase, and Nasdaq are piloting tokenised markets, with strong growth potential projected. Estimates range from a few trillion dollars to as much as 16 trillion dollars by 2030, highlighting both the scale of opportunity and uncertainty surrounding adoption.

Tokenisation reflects a broader shift in how value is created, exchanged, and trusted in the digital age, gradually moving finance towards more programmable and interconnected systems.

Its importance lies in how it may redefine the relationship between institutions, markets, and users, shaping not only efficiency and access but also the future balance between innovation, governance, and stability.

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