This week’s developments show the crypto sector evolving under dual pressure: the need for innovation and the demand for stronger oversight. In the US, Coinbase is urging regulators to modernize anti–money laundering frameworks with AI and blockchain tools. In Europe, France is calling for centralized supervision of crypto exchanges under ESMA, and in South America, Bolivia’s new president plans to use blockchain to tackle corruption and strengthen financial transparency.
Coinbase urges the U.S. Treasury to modernize AML rules
Coinbase has called on the U.S. Treasury to overhaul anti–money laundering (AML) rules for digital assets, arguing that innovation — not tighter enforcement — is the key to tackling financial crime. In a 30-page response to the Treasury’s request for input, the exchange said current frameworks under the Bank Secrecy Act (BSA)need to be updated, as although they currently collect vast amounts of personal data, they can miss criminal activity.
The company recommends safe harbors for firms that adopt emerging technologies such as AI-based monitoring, decentralized identity systems, and zero-knowledge proofs, which could enhance compliance accuracy while protecting user privacy. Coinbase also proposed the introduction of regulatory sandboxes where companies and regulators can test new compliance models before formal adoption.
Paul Grewal, Coinbase’s Chief Legal Officer, summarized the submission by saying, “When bad guys innovate in financial crime, good guys need innovation to keep pace.” The company’s position comes as Congress and the Treasury debate tougher oversight of decentralized finance and crypto intermediaries. Coinbase argues that technology-driven collaboration between the public and private sectors would be more effective than prescriptive mandates or rigid reporting requirements.
Why this matters:
Coinbase’s proposal signals a shift in tone between regulators and the crypto industry. Rather than resisting oversight, the company is advocating for a new compliance model that leverages blockchain analytics and AI to meet AML objectives more efficiently. For regulators and compliance teams, it highlights the growing importance of innovation as a defensive tool, suggesting future AML frameworks may prioritize verifiable outcomes over rigid data-collection requirements.
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Bank of France pushes for ESMA to oversee crypto exchanges directly
France is continuing its push the European Union to give the European Securities and Markets Authority (ESMA) direct supervisory power over major crypto exchanges and stablecoin issuers; a move that would end the current system allowing firms licensed in one EU member state to “passport” their authorization across all 27. This builds on the joint call for ESMA supervision of MiCA implementation made along with Italy and Austria in September 2025.
François Villeroy de Galhau, Governor of the Bank of France, said the fragmented framework has created regulatory loopholes, with companies “shopping” for lighter jurisdictions to secure licenses before expanding EU-wide. He warned that the practice undermines market integrity and leaves consumers exposed to inconsistent oversight.
If approved, the change would have significant implications for exchanges offering leveraged trading products and for stablecoin issuers such as Circle and Paxos, which currently operate under MiCA’s multi-issuance framework. France’s proposal, backed by the European Central Bank, argues that direct ESMA control would bring greater consistency and reduce the risk of cross-border arbitrage, particularly during market stress.
Under the proposed framework, ESMA would move from an advisory to an enforcement role, with the power to revoke licenses and directly supervise EU market participants. However, the change requires unanimous support from member states, some of which benefit economically from attracting crypto businesses through their national regimes.
Why this matters:
France’s proposal represents a major step toward centralized EU-level supervision of digital assets, echoing how the bloc regulates banks and securities. For compliance and legal teams, this could mean a single set of rules enforced by one authority, reducing national discrepancies but increasing the scrutiny of operational models and leverage-based products. The move also raises strategic questions for global exchanges that built their European footprint around lighter regimes — signaling a coming era of tighter, more unified oversight.
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Bolivia’s new president backs blockchain to fight corruption
Bolivia’s president-elect Rodrigo Paz has announced plans to use blockchain technology to improve transparency in public procurement and to integrate crypto assets into a new government stabilization fund.
According to the Associated Press, Paz, who won the October run-off with 54.5% of the vote — intends to implement smart contracts in state purchasing systems to reduce opportunities for corruption. His administration also plans to allow citizens to declare crypto holdings as part of an asset-regularization initiative designed to strengthen foreign exchange reserves and stabilize the national currency.
Bolivia’s move builds on a broader digital transformation that began in 2024, when the country’s central bank lifted its operational ban on crypto transactions. Since then, institutional adoption has accelerated: local banks have introduced USDT custody, and major retail brands now accept stablecoin payments.
While Paz is not proposing to adopt Bitcoin as legal tender, his approach signals a pragmatic integration of blockchain into governance and economic policy, positioning Bolivia as one of South America’s more forward-leaning nations on digital innovation.
Why this matters:
Bolivia’s plan shows how blockchain can move from financial infrastructure to governance reform, offering transparency where traditional systems fall short. For regulators and compliance professionals, it underscores the global diversification of crypto policy — where developing economies are using blockchain not just for payments, but as an anti-corruption and accountability tool. The success or failure of Bolivia’s model could influence similar initiatives across Latin America and beyond.
Read more on Cointelegraph
