Economic

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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Japan backs domestic AI model for robotics

Japan’s industry ministry has approved ¥387.3 billion in funding for a domestic AI project to develop a multimodal foundation model for physical AI systems that control robots. The initiative is part of a broader effort to strengthen Japan’s position in advanced AI technologies.

The project aims to develop a foundation model that can be widely adopted by Japanese companies to support industrial automation and robotics. Officials see the initiative as a strategic effort to narrow the technology gap with the United States and China in next-generation AI.

The programme is being led by Noetra Corp., a consortium that includes SoftBank Corp. Engineers from SoftBank and Preferred Networks Inc. will contribute to development alongside researchers from the National Institute of Advanced Industrial Science and Technology and other partners.

Over the next five years, the consortium plans to release an initial version of the foundation model during the current fiscal year, followed by annual upgrades incorporating industrial data from manufacturers and other participating companies.

Why does it matter? 

Japan’s investment reflects the growing importance of sovereign AI capabilities as countries seek greater control over the foundation models that will power future industries. By developing a domestic model tailored to robotics and industrial automation, Japan aims to strengthen its manufacturing sector while reducing reliance on foreign AI platforms.

The initiative also highlights the shift towards physical AI as the next frontier of AI development. As foundation models increasingly move beyond text and images to control robots and other autonomous systems, advances in multimodal AI could reshape manufacturing, logistics and other industrial sectors where Japan has long been a global leader.

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Malaysia adopts AI-centred digital strategy to 2030

Malaysia has launched the Malaysia Digital Action Plan 2030 (MD2030), a national roadmap that places the Ministry of Digital at the centre of efforts to achieve the country’s ambition of becoming an AI-driven nation by 2030.

Unveiled by Prime Minister Anwar Ibrahim, the strategy aims to transform Malaysia from a consumer of technology into a producer of homegrown digital innovation through a coordinated, whole-of-government approach.

The five-year plan sets national priorities across economic growth, digital public services, infrastructure, talent development, cybersecurity and AI innovation. It is built around seven strategic pillars covering government, the economy, infrastructure, talent, society, trust and security, and innovation.

MD2030 also aligns existing national initiatives, including the Malaysia Digital Economy Blueprint and the National Fourth Industrial Revolution Policy, while supporting the country’s broader economic agenda.

Implementation will be coordinated by the Ministry of Digital in collaboration with agencies including the National AI Office, the Malaysia Digital Economy Corporation, CyberSecurity Malaysia, GovTech Malaysia and MyDIGITAL Corporation.

The government said the strategy will prioritise responsible AI governance, digital trust, AI readiness, smart public services, digital inclusion and the development of domestic AI capabilities across government, business and society.

Why does it matter?

MD2030 positions AI as a core driver of Malaysia’s economic development, public-sector modernisation and long-term competitiveness. By combining AI governance, cybersecurity, digital infrastructure, skills development and innovation within a single national framework, the government is pursuing a coordinated approach to digital transformation rather than isolated technology initiatives.

The strategy also reflects intensifying regional competition to build sovereign AI capabilities. As Southeast Asian countries expand investment in AI infrastructure, talent and governance, Malaysia is seeking to strengthen its domestic innovation ecosystem while promoting trusted and responsible AI adoption across the economy.

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UK CMA consults on Apple App Store steering rules

The UK Competition and Markets Authority has opened a consultation on a proposed conduct requirement that would allow app developers to steer users outside Apple’s App Store to complete digital purchases.

The proposal applies to Apple’s Mobile Platform, which the CMA designated as having Strategic Market Status in October 2025. The consultation is part of the UK’s digital markets competition regime and closes on 28 July 2026.

The CMA said Apple’s App Store is a key gateway for developers distributing native apps in the UK. Its proposal focuses on apps that sell digital goods and services, where developers are generally restricted from directing users to alternative offers or purchases outside Apple’s in-app payment system.

Under the proposed steering conduct requirement, Apple would have to allow developers to communicate with UK users and include redirection mechanisms, such as links or buttons, that lead to external websites for purchases.

Apple could still impose restrictions where they are strictly necessary and objectively justified, including to address malware, fraud, scams, unlawful content or content harmful to children.

The proposal would also regulate how external purchasing options are presented. Apple could use a single interstitial screen to inform users that they are leaving its in-app purchase system, but the screen would need to use neutral language and must not discourage users from completing transactions elsewhere.

The CMA is also proposing that any fee Apple charges on steered transactions must be fair and reasonable. It would also prohibit Apple from discriminating against developers that use redirection mechanisms, including through app review, search ranking, platform functionality or access to interoperability features.

The CMA said effective steering could give developers more control over pricing, billing, refunds and customer support, while giving users more choice and potentially lower prices.

Why does it matter?

The consultation shows the UK’s digital markets regime moving from platform designation to targeted behavioural rules. If adopted, the requirement could weaken Apple’s control over in-app transactions for digital goods and services in the UK and give developers more room to offer alternative payment channels. It also tests how the CMA will balance competition, consumer choice, security, privacy and platform investment under the new Strategic Market Status framework.

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HP adopts OpenAI Frontier for enterprise AI

HP has announced a strategic partnership with OpenAI to integrate OpenAI Frontier across parts of its customer-facing services and internal operations.

The company said the partnership supports its broader future-of-work strategy, with an initial focus on customer experience, partner services, employee productivity and software development.

HP plans to use OpenAI Frontier to create a more consistent experience across its retail, partner, chat and voice channels, helping customers and partners resolve routine queries and complete workflows more efficiently.

The company said it is among the first global enterprises to adopt the Frontier platform. While specific use cases will evolve over time, the initial focus includes customer and partner tools, telemetry insights through the Workforce Experience Platform, employee productivity and software development.

These include customer and partner-facing tools, customer telemetry insights and reporting through HP’s Workforce Experience Platform, employee productivity and software development.

The partnership follows an evaluation phase that began in February 2026, during which HP assessed OpenAI Frontier’s technical capabilities, enterprise integration, security features and potential business applications.

HP said it also tested agentic capabilities during the evaluation. The company said the results led it to conclude that OpenAI offers models and agent-based capabilities aligned with its strategic priorities.

HP and OpenAI now plan to co-develop future use cases. HP said these will need to meet its enterprise standards, particularly around data integration, governance and security.

OpenAI said HP had already used OpenAI APIs and tools such as ChatGPT and Codex in early projects. The companies said the new partnership is intended to move beyond pilots toward broader enterprise deployment.

HP also linked the partnership to its broader AI hardware strategy, saying it is developing agentic AI devices and dedicated hardware designed to support continuous AI inference and integrate seamlessly into workplace workflows.

For AI workloads that require continuous inference, HP said it is building devices with dedicated hardware optimised to run agentic AI workloads around the clock.

HP also pointed to its Workforce Experience Platform, which is used to manage device fleets and provide telemetry insights across PCs, workstations, printers and collaboration tools.

HP said the partnership reflects a broader shift from isolated AI pilots to enterprise-wide deployment, with AI increasingly serving as an operating layer embedded across customer services, software development and business operations.

Why does it matter?

The partnership illustrates how large enterprises are moving beyond experimental AI deployments towards organisation-wide integration. Rather than treating AI as a standalone application, companies are increasingly embedding it into customer support, software development, employee productivity and operational workflows.

It also highlights the growing importance of enterprise AI governance. As organisations deploy increasingly capable agentic systems, success will depend not only on model performance but also on secure integration, data governance and oversight that ensure AI can operate reliably within existing business processes.

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South Korea plans $518 billion semiconductor hub for AI demand

Samsung Electronics and SK Hynix have announced plans to invest a combined 800 trillion won, about $518 billion, in a new semiconductor manufacturing hub in South Korea’s southwest.

The two companies, which together produce around two-thirds of the world’s memory chips, will each build two new fabrication plants outside their existing manufacturing base in Gyeonggi Province.

Samsung’s new facilities are planned for the city of Gwangju, with several possible sites under consideration, including land linked to a military air base planned for relocation.

The investment responds to rising demand for memory chips used in AI data centres, industrial robotics and autonomous vehicles. Existing semiconductor facilities in Gyeonggi Province are expected to face capacity pressure sooner than previously projected.

South Korea’s government is also linking the project to a broader strategy to build a nationwide semiconductor ecosystem. Existing hubs in the Southeast are expected to expand chip component and material production. At the same time, the central Chungcheong region will focus on chip packaging, and data centres will be developed across the country.

The project also supports the government’s goal of spreading major technology investment beyond the Seoul metropolitan area, where much of the country’s semiconductor industry has historically been concentrated.

Why does it matter?

The planned investment shows how AI demand is driving long-term semiconductor capacity expansion at a national scale. Memory chips are central to AI data centres and high-performance computing, and Samsung and SK Hynix remain two of the most important suppliers in the global market. South Korea’s decision to link new chip fabrication with regional development also shows how AI infrastructure is becoming part of broader industrial and economic planning, not only technology strategy.

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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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European Banking Authority proposes framework for MiCA enforcement fines

The European Banking Authority (EBA) has launched a consultation on a draft methodology for calculating fines under the Markets in Crypto-Assets Regulation (MiCA), aiming to ensure penalties are applied consistently, proportionately and transparently.

Under MiCA, the EBA supervises issuers of significant asset-referenced tokens (ARTs) and e-money tokens (EMTs). The proposed methodology explains how fines would be calculated when issuers or members of their management bodies are found to have intentionally or negligently breached regulatory requirements.

According to the EBA, the methodology is intended to improve transparency and consistency in enforcement while helping market participants better understand how supervisory penalties are determined in practice.

The public consultation will remain open until 28 September 2026, with a virtual public hearing scheduled for 16 July. The EBA said all feedback will be published after the consultation as part of its continued implementation of the MiCA framework.

Why does it matter?

The consultation strengthens the enforcement framework underpinning MiCA by claryfing how financial penalties will be calculated for significant crypto-asset issuers. Greater transparency and consistency can improve legal certainty for firms while reinforcing confidence that supervisory actions will be applied fairly across the EU.

The proposal also reflects the continued integration of crypto-assets into mainstream financial regulation. As MiCA moves from rulemaking to supervision and enforcement, detailed methodologies such as this one demonstrate how EU authorities are building a more mature and predictable regulatory environment for digital assets.

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US community lenders oppose stablecoin provisions in crypto bill

US community banks are campaigning against digital asset legislation, arguing it could encourage customers to move deposits from local lenders into stablecoins.

The Independent Community Bankers of America, which represents about 4,000 community banks, has launched an advertising campaign targeting provisions in the Digital Asset Market Clarity Act. The group argues that the bill could allow crypto firms and intermediaries to offer rewards or incentives linked to stablecoin use.

ICBA says such incentives could accelerate deposit outflows from community banks, reducing their ability to lend to small businesses, farmers and local communities. Based on its analysis of industry research, the group estimates that stablecoin-related deposit shifts could reduce community bank deposits by $1.3 trillion and cut lending by $850 billion.

Community banks argue that they play a central role in local credit creation, including agricultural and small-business lending. Bank executives warn that if deposits move into stablecoins, lenders may need to rely on more expensive funding sources, raising borrowing costs and limiting access to credit.

Crypto industry supporters reject the criticism, arguing that the legislation would provide clearer federal rules for digital assets and expand consumer choice. They say banking opposition reflects concern over competition, while banking groups argue they are seeking equivalent regulatory standards rather than protection from innovation.

The dispute highlights a growing policy tension over stablecoins, deposit competition and the role of banks in local economies as US lawmakers consider broader digital asset legislation.

Why does it matter?

The debate shows that stablecoin regulation is not only about crypto market oversight or consumer protection. It also raises questions about the structure of credit creation in the US economy. If stablecoins become attractive alternatives to bank deposits, local lenders argue they could lose funding used for small-business, agricultural and community lending. Crypto supporters see the same issue as an opportunity for competition and innovation. The outcome could shape how digital assets interact with traditional banking, especially outside major financial centres.

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