Encryption

UK and US join forces to promote responsible cryptocurrency adoption

The United Kingdom and the United States are set to strengthen their collaboration in advancing cryptocurrency adoption. UK Finance Minister Rachel Reeves confirmed that the UK plans to introduce a comprehensive regulatory framework for crypto assets.

The government hopes to work closely with the US to promote the responsible use of the asset class.

Under President Trump’s leadership, the US has become increasingly supportive of cryptocurrency, marking a significant shift towards pro-crypto policies. With these developments, both countries aim to foster wider, more secure adoption of crypto.

The UK is specifically focusing on regulatory frameworks to prevent misuse while encouraging innovation.

In its bid to become a global leader in digital assets, the UK has published draft legislation on crypto regulation. Reeves stated that international cooperation would be essential for success.

She emphasised that collaboration between the UK and the US could establish groundbreaking regulatory standards, elevating the crypto industry to new heights.

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

Abu Dhabi institutions plan a dirham-pegged stablecoin

Three major Abu Dhabi institutions are teaming up to launch a dirham-pegged stablecoin, pending regulatory approval. The partners include Abu Dhabi’s sovereign wealth fund ADQ, First Abu Dhabi Bank (FAB), and the International Holding Company (IHC).

The stablecoin will be regulated by the UAE’s central bank and backed by the dirham. It aims to support use cases like machine-to-machine communication and artificial intelligence. The project will operate on the ADI blockchain, created by the ADI Foundation, a non-profit focused on blockchain adoption.

The initiative seeks to position the UAE as a leader in global blockchain innovation. It also aims to strengthen the country’s digital infrastructure and provide new financial opportunities.

The UAE joins other nations exploring alternatives to US dollar-backed stablecoins, as global interest in national digital currencies grows.

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

The stablecoin market remains largely dominated by Tether

Tether (USDT) continues to lead the stablecoin market with a 66% market share, while USDC follows at 28%, according to Nansen’s 25 April report. Ethena’s USDe stablecoin ranks a distant third with just over 2%.

Although USDC has grown faster, Tether’s dominance is expected to persist due to its large user base and the market’s ‘winner-takes-most’ nature. Tether remains the most profitable stablecoin issuer, with profits of nearly $14 billion expected in 2024.

USDC’s growth has accelerated since November, thanks to a more favourable regulatory environment. It is particularly appealing to institutions seeking regulatory clarity. However, traditional financial institutions, such as PayPal and Fidelity, are increasing competition with their stablecoins.

Ethena’s USDe stablecoin remains competitive, offering yield-bearing features with a 19% annualised yield. It has been integrated into both CEXs and DeFi protocols, positioning it for future growth.

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

South Korea’s ruling party targets crypto deregulation in its new agenda

South Korea’s People Power Party (PPP) has pledged to approve spot crypto ETFs and remove the ‘one exchange, one bank’ rule before the end of the year.

These moves are aimed at increasing competition and offering consumers more choice in the crypto market.

Additionally, the PPP plans to institutionalise corporate and institutional investor participation in crypto and legalise spot crypto ETFs. Nonprofits will also be allowed to trade crypto starting from Q2.

The PPP’s reforms also include a ‘global standard’ regulatory framework for stablecoins and the creation of a Virtual Asset Special Committee under the presidential office.

The shift mirrors global trends towards crypto deregulation, drawing comparisons with the US’s Trump-era policies.

PPP’s proposals depend on the results of South Korea’s upcoming election on 3 June. The Democratic Party’s candidate, Lee Jae-myung, has a strong lead in the polls, which could affect the implementation of these reforms.

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

Mastercard launches stablecoin payment support

Mastercard is stepping up its crypto ambitions by enabling stablecoin transactions through new partnerships. The payment giant announced a collaboration with crypto exchange OKX, processor Nuvei, and fintech firm Circle.

The goal is to build an ecosystem where users can spend stablecoins and merchants can accept them.

A new card issued with OKX will allow stablecoin holders to pay directly using crypto, while Nuvei and Circle will support the infrastructure behind these transactions.

Mastercard’s Chief Product Officer said stablecoins have the potential to simplify global payments. They can also empower both consumers and businesses by offering more choices.

Mastercard plans to allow users to spend stablecoins from their wallets at over 150 million merchant locations worldwide that already accept its cards.

The move comes as regulatory discussions around stablecoins continue in the US. The Securities and Exchange Commission recently stated that certain dollar-pegged tokens do not qualify as securities. However, it stopped short of offering clarity on yield-bearing or algorithmic stablecoins, leaving questions open for future decisions.

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

El Salvador keeps buying Bitcoin under the IMF radar

El Salvador continues quietly accumulating Bitcoin, even as it complies with conditions set by the International Monetary Fund (IMF). Although the government paused Bitcoin activity to secure a $1.4 billion loan, the Bitcoin Office kept buying. It added 32 BTC last month, now holding over 6,160 BTC worth $584 million.

The small daily purchases adhere to the country’s ‘one Bitcoin a day’ policy.

The IMF confirmed El Salvador’s fiscal sector is meeting its non-accumulation pledge, but the Bitcoin Office operates outside those fiscal definitions. The technical loophole has allowed the country to continue acquiring Bitcoin without breaching the agreement.

The reforms agreed with the IMF include scaling back the Chivo wallet initiative and removing Bitcoin’s mandatory status as legal tender.

Despite the pressure, President Nayib Bukele remains committed to the Bitcoin strategy. In January, El Salvador’s Legislative Assembly passed amendments removing Bitcoin as a compulsory payment method and tax payment option.

These changes, effective from 1 May, were necessary to unlock IMF funding. They also opened access to an additional $2 billion in development financing aimed at stabilising the economy and reducing debt, which recently reached 85% of GDP.

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

Quantum encryption achieves new milestone without cryogenics

Computer scientists at Toshiba Europe have set a new record by distributing quantum encryption keys across 158 miles using standard computer equipment and existing fibre-optic infrastructure.

Instead of relying on expensive cryogenic cooling, which is often required in quantum computing, the team achieved this feat at room temperature, marking a significant breakthrough in the field.

Experts believe this development could lead to the arrival of metropolitan-scale quantum encryption networks within a decade.

David Awschalom, a professor at the University of Chicago, expressed optimism that quantum encryption would soon become commonplace, reflecting a growing confidence in the potential of quantum technologies instead of viewing them as distant possibilities.

Quantum encryption differs sharply from modern encryption, which depends on mathematical algorithms to scramble data. Instead of mathematical calculations, quantum encryption uses the principles of quantum mechanics to secure data through Quantum Key Distribution (QKD).

Thanks to the laws of quantum physics, any attempt to intercept quantum-encrypted data would immediately alert the original sender, offering security that may prove virtually unbreakable.

Until recently, the challenge was distributing quantum keys over long distances because traditional fibre-optic lines distort delicate quantum signals. However, Toshiba’s team found a cost-effective solution using twin-field quantum key distribution (TF-QKD) instead of resorting to expensive new infrastructure.

Their success could pave the way for a quantum internet within decades, transforming what was once considered purely theoretical into a real-world possibility.

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

MTN confirms cybersecurity breach and data exposure

MTN Group has confirmed a cybersecurity breach that exposed personal data of some customers in certain markets. The telecom giant assured the public, however, that its core infrastructure remains secure and fully operational.

The breach involved an unknown third party gaining unauthorised access to parts of MTN’s systems, though the company emphasised that critical services, including mobile money and digital wallets, were unaffected.

In a statement released on Thursday, MTN clarified that investigations are ongoing, but no evidence suggests any compromise of its central infrastructure, such as its network, billing, or financial service platforms.

MTN has alerted the law enforcement of South Africa and is collaborating with regulatory bodies in the affected regions.

The company urged customers to take steps to safeguard their data, such as monitoring financial statements, using strong passwords, and being cautious with suspicious communications.

MTN also recommended enabling multi-factor authentication and avoiding sharing sensitive information like PINs or passwords through unsecured channels.

While investigations continue, MTN has committed to providing updates as more details emerge, reiterating its dedication to transparency and customer protection.

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

UK introduces landmark online safety rules to protect children

The UK’s regulator, Ofcom, has unveiled new online safety rules to provide stronger protections for children, requiring platforms to adjust algorithms, implement stricter age checks, and swiftly tackle harmful content by 25 July or face hefty fines. These measures target sites hosting pornography or content promoting self-harm, suicide, and eating disorders, demanding more robust efforts to shield young users.

Ofcom chief Dame Melanie Dawes called the regulations a ‘gamechanger,’ emphasising that platforms must adapt if they wish to serve under-18s in the UK. While supporters like former Facebook safety officer Prof Victoria Baines see this as a positive step, critics argue the rules don’t go far enough, with campaigners expressing disappointment over perceived gaps, particularly in addressing encrypted private messaging.

The rules, part of the Online Safety Act pending parliamentary approval, include over 40 obligations such as clearer terms of service for children, annual risk reviews, and dedicated accountability for child safety. The NSPCC welcomed the move but urged Ofcom to tighten oversight, especially where hidden online risks remain unchecked.

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

Ransomware decline masks growing threat

A recent drop in reported ransomware attacks might seem encouraging, yet experts warn this is likely misleading. Figures from the NCC Group show a 32% decline in March 2025 compared to the previous month, totalling 600 incidents.

However, this dip is attributed to unusually large-scale attacks in earlier months, rather than an actual reduction in cybercrime. In fact, incidents were up 46% compared with March last year, highlighting the continued escalation in threat activity.

Rather than fading, ransomware groups are becoming more sophisticated. Babuk 2.0 emerged as the most active group in March, though doubts surround its legitimacy. Security researchers believe it may be recycling leaked data from previous breaches, aiming to trick victims instead of launching new attacks.

A tactic like this mirrors behaviours seen after law enforcement disrupted other major ransomware networks, such as LockBit in 2024.

Industrials were the hardest hit, followed by consumer-focused sectors, while North America bore the brunt of geographic targeting.

With nearly half of all recorded attacks occurring in the region, analysts expect North America, especially Canada, to remain a prime target amid rising political tensions and cyber vulnerability.

Meanwhile, cybercriminals are turning to malvertising, malicious code hidden in online advertisements, as a stealthier route of attack. This tactic has gained traction through the misuse of trusted platforms like GitHub and Dropbox, and is increasingly being enhanced with generative AI tools.

Instead of relying solely on technical expertise, attackers now use AI to craft more convincing and complex threats. As these strategies grow more advanced, experts urge organisations to stay alert and prioritise threat intelligence and collaboration to navigate this volatile cyber landscape.

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