Exclusive-France Threatens To Block Crypto Licence 'passporting' In EU Regulatory Fight

Samantha Luan

Cryptocurrency

Forex

Political

Economic

Summary:

France has warned it may try to block some crypto firms licenced in other EU countries from operating domestically as part of a push to get oversight transferred to the bloc’s central securities regulator, the head of its financial watchdog told Reuters.France's securities watchdog, the AMF, is concerned that under the EU's new regulatory regime, crypto companies are seeking out jurisdictions with more lenient licensing standards, its president, Marie-Anne Barbat-Layani, said.

MiCA, a landmark set of digital asset rules which came into force this year, allows crypto companies to apply for licences from individual EU members, which they can use as a "passport" to operate throughout the 27-nation bloc.The legislation has already exposed inconsistencies in how national regulators apply the rules, raising questions about whether some licences are being granted too quickly and whether cross-border firms are being adequately supervised.

OVERSIGHT GAPS RAISE ALARM

At stake is oversight of the multi-trillion-dollar crypto industry, which regulators globally have long warned could destabilise markets and harm investors if not properly supervised.On Monday, France joined Italy and Austria in calling for the European Securities and Markets Authority (ESMA), based in Paris, to take over supervision of major crypto firms, according to a position paper seen by Reuters.

In its strongest warning yet, the AMF told Reuters that France would not rule out the possibility of using the "atomic weapon" of challenging the "passporting" of a license granted by a different member state.A hallmark of the EU's single market for financial services, "passporting" allows companies authorised by one member state to operate across the bloc. The AMF did not give details about which companies' licences it could consider challenging, or on what basis.

"We do not exclude the possibility of refusing the EU passport," Barbat-Layani said. "It's very complex legally and not a very good signal for the single market - it's a bit like the 'atomic weapon' ... but it's still a possibility we hold in reserve."Crypto platforms "are doing their regulatory shopping all over Europe, trying to find a weak link that will give them a licence with fewer requirements than the others," she added, without providing specific examples.

MAJOR DIFFERENCES BETWEEN REGULATORS

In Monday's paper, France's AMF, Italy's Consob and Austria's FMA called on European lawmakers to introduce a mechanism to transfer powers to ESMA."The first few months of the application of the Regulation have revealed major differences in how crypto-markets are being supervised by national authorities," the three regulators said.

Direct European supervision would better protect investors, they said.

Malta's financial regulator faced scrutiny over its licence-granting process earlier this year. An ESMA review found that Malta did not do enough to assess the risk when granting a licence to one particular unnamed crypto company. Malta said it was proud of its role as an "early adopter" of digital asset regulation.The French, Italian and Austrian regulators did not give examples of where regulators had interpreted the rules differently.

Crypto companies are in the process of applying for MiCA licences during a transition period. Luxembourg granted a licence to U.S.-listed exchange Coinbase and Malta gave a licence to the Winklevoss-founded exchange Gemini.France, Italy and Austria also called for MiCA revisions, including stricter rules for crypto companies’ activities outside of the EU, better cybersecurity supervision, and a review of how authorities manage new crypto token offerings.France has long been pushing for ESMA to be given greater power. ESMA head Verena Ross has said she would welcome the move, but it faces resistance from some EU members.

Source: Yahoo Finance

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Gerik

Economic

New Regulatory Framework Raises Minimum Capital Standards

The State Bank of Vietnam (SBV) has officially implemented Circular 14/2025/TT-NHNN from September 15, mandating that all commercial banks and foreign bank branches maintain a minimum capital adequacy ratio (CAR) of 8%. This baseline requirement applies to both standalone institutions and consolidated banking groups, including subsidiaries.

Within this 8%, core Tier 1 capital must be no less than 4.5%, while total Tier 1 capital is required to meet a minimum threshold of 6%. The regulation aligns Vietnam’s banking system more closely with international Basel III standards, reinforcing systemic stability and risk absorption capacity in an increasingly complex financial environment.

Introduction of Capital Buffers Signals Proactive Prudential Oversight

Circular 14 introduces two additional capital buffers: the Capital Conservation Buffer (CCB) and the Counter-Cyclical Capital Buffer (CCyB). The CCB will be phased in gradually over four years, starting at 0.625% in the first year and reaching 2.5% by the fourth year.

This means that the consolidated CAR requirement will climb from 8.625% in the first year to 10.5% by 2029. Likewise, Tier 1 capital with buffer adjustments will increase from 6.625% to 8.5%, while core Tier 1 capital (CET1) with buffer will rise from 5.125% to 7%.

This structure serves a dual purpose: to improve shock resilience in periods of economic volatility, and to encourage conservative risk-taking behavior even during credit expansion cycles. The inclusion of a counter-cyclical buffer gives regulators the flexibility to increase capital requirements during credit booms to prevent systemic overheating.

Dividend Payout Restrictions Encourage Internal Capital Reinforcement

A notable clause in the regulation is the restriction on cash profit distribution. Banks may only pay out profits in cash once they fully comply with the new capital standards. This measure forces institutions to prioritize capital accumulation over shareholder returns, incentivizing stronger financial foundations.

The emphasis on capital reinforcement has led many banks to increase their charter capital through various channels. These include retained earnings, issuing new shares, and raising subordinated debt instruments that qualify as Tier 2 capital under regulatory definitions.

Capital Growth Momentum Accelerates in Anticipation of the Circular

As banks anticipated the enforcement of Circular 14, the sector began ramping up capital throughout 2025. By the end of June 2025, total charter capital across 29 surveyed banks reached 879.352 trillion VND, up 6.6% from the end of 2024. Five major banks Vietcombank, VPBank, Techcombank, BIDV, and MB collectively held 41% of the system’s total capital, reinforcing their dominant role in Vietnam’s financial ecosystem.

This increase in capital is not just a compliance exercise but also a strategic move to maintain competitiveness and creditworthiness as the regulatory landscape tightens. Banks with stronger capital buffers will have more room to expand credit, absorb shocks, and engage in international transactions under global risk-based capital standards.

Circular 14/2025/TT-NHNN marks a significant regulatory step in strengthening Vietnam’s banking sector. By enforcing higher and phased capital requirements, the central bank aims to fortify financial system resilience, mitigate macro-financial vulnerabilities, and align domestic practices with international regulatory frameworks. As the transition unfolds, banks must carefully balance capital enhancement strategies with profitability goals, ensuring that long-term solvency remains at the forefront of corporate strategy.

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Economic

Stock Market Rallies on Hopes of Fed Pivot

U.S. financial markets ended last week on an optimistic note, buoyed by growing expectations that the Federal Reserve will deliver its first interest rate cut since the tightening cycle began. Despite a mixed closing on Friday, the Dow Jones Industrial Average rose nearly 1% for the week, snapping a three-week losing streak. Meanwhile, the S&P 500 and Nasdaq notched their strongest weekly performances since early August.

This market enthusiasm is reinforced by subdued Treasury yields and surging gold prices both signals that investors are preparing for a potential policy shift by the Fed.

According to the CME FedWatch tool, the probability of a 25 basis point rate cut at this week’s meeting exceeds 90%. Such expectations are grounded in rising concerns over a softening labor market, even as inflation remains stubbornly high.

Jerome Powell Caught Between Conflicting Macro Signals

At the center of this week’s policy meeting is Chair Jerome Powell, whose challenge is growing more acute. If the Fed moves too slowly on rate cuts, it risks exacerbating labor market fragility. But if it loosens monetary conditions too rapidly, inflation could reaccelerate, undermining months of tightening efforts.

Recent macroeconomic data illustrates this tightrope. The August consumer price index (CPI) showed persistent inflationary pressures across sectors, including food, coffee, airfares, and auto parts. Particularly notable was a 6% increase in airline ticket prices, signaling that service-sector inflation remains elevated. Some of this inflationary momentum has been attributed to new retaliatory tariffs implemented by the Trump administration, which helped generate a record $29.5 billion in tariff revenue last month.

In parallel, the labor market is showing cracks. Weekly jobless claims have risen to their highest levels in nearly four years. Additionally, August saw a net job creation of only 22,000, and revised data revealed that employment growth in the 12 months through March 2025 was overstated by nearly one million jobs. These figures suggest a material slowdown in hiring momentum, raising red flags about economic resilience.

Dot Plot Projections and Powell’s Communication Challenge

Investors are also keenly watching the Fed’s updated "dot plot," which maps the individual interest rate projections of Federal Open Market Committee (FOMC) members. In June, policymakers anticipated two rate cuts in 2025, but internal divergence has since widened. As of the last update, seven FOMC members projected no cuts at all in 2025, up from four in March.

Powell has previously downplayed the dot plot’s predictive power, calling it merely a forecast during a period of uncertainty. However, markets are now demanding greater clarity. Investors will closely analyze Powell’s post-meeting press conference for any forward guidance on the rate path, inflation expectations, and the Fed’s interpretation of recent labor data.

The credibility of the Fed’s dual mandate controlling inflation while ensuring full employment hinges on Powell’s ability to balance the tone of caution with the urgency of policy adaptation.

Economic Data and Corporate Earnings Add to the Narrative

Beyond the Fed’s decision, markets this week will digest a wave of new economic data, including August retail sales, weekly unemployment claims, and manufacturing indices. These indicators will offer additional context for assessing consumer demand and industrial health.

On the corporate front, the tail end of earnings season features reports from FedEx, a bellwether of global trade and U.S. economic activity. The company’s performance is often seen as a proxy for broader economic momentum. Other notable earnings come from homebuilder Lennar, food producer General Mills, and restaurant chains Darden and Cracker Barrel the latter drawing attention for its ongoing rebranding efforts.

As markets hold their breath ahead of the Fed’s policy announcement, Jerome Powell finds himself navigating a difficult environment marked by contradictory pressures: persistent inflation and emerging signs of economic cooling. Whether the central bank chooses to initiate a rate cut this week or signal one in the near future, the broader message from the Fed will shape not only market direction but also perceptions of its credibility in managing an increasingly complex economic landscape.

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Economic

Japan’s Elderly Population Surges to 29.4%—A Global High

Japan is entering an increasingly critical stage of demographic aging. According to data released on September 15 by the Ministry of Internal Affairs and Communications, seniors aged 65 and over now make up 29.4% of the national population. This marks the highest percentage Japan has ever recorded and places it at the top globally among countries with populations exceeding 40 million. For comparison, Italy follows at 25.1%, with Germany at 23.7% and France at 22.5%, according to UN estimates.

The demographic structure also shows a stark gender imbalance: Japan currently has 15.68 million elderly men and 20.51 million elderly women, a difference of nearly 5 million. Meanwhile, those aged 70 and above now account for 23.5% of the population, and people over 80 make up 10.5%.

Elderly Workforce Participation Hits New Records

While aging presents growing socio-economic challenges, it is also reshaping Japan’s labor market. The number of elderly individuals still participating in the workforce has risen for the 21st consecutive year, now reaching a record 9.3 million. This group now makes up 25.7% of the elderly population, reflecting a year-on-year increase of 160,000 people.

Age-based breakdowns show that among the working elderly, 53.6% fall within the 65–69 age group, 35.1% are aged 70–74, and a remarkable 12% are aged 75 or older. This highlights not only extended longevity but also a social necessity: many retirees return to work due to financial pressures, rising living costs, or personal fulfillment.

As a share of the total working-age population (15 years and older), elderly workers now account for 13.7%, meaning that roughly one in every seven workers in Japan is a senior.

Retail and Healthcare Sectors Most Dependent on Elderly Workers

Labor force participation among seniors is particularly concentrated in specific industries. Wholesale and retail sectors employ the most, with 1.33 million elderly workers. Healthcare and welfare services follow with 1.15 million, reflecting the paradox of a graying society increasingly reliant on the elderly themselves to sustain key support sectors.

This trend points to both a labor shortage in these industries and the increasing economic role that aging individuals continue to play despite retirement eligibility.

Long-Term Projections Paint a More Complex Picture

The National Institute of Population and Social Security Research projects that the proportion of elderly in Japan’s population will continue to climb. By 2040, seniors are expected to make up 34.8% of the population, and by 2050, this figure may reach 37.1%. These increases are primarily attributed to the aging of the second baby boom generation (born between 1971 and 1974), whose transition into retirement age will intensify demographic pressure over the next two decades.

While these trends are structurally inevitable, they present profound implications for healthcare, pensions, urban planning, labor market design, and intergenerational equity.

Japan stands at the forefront of a demographic shift that many advanced economies will eventually face. Its record-high aging rate is not only reshaping social policy but also redefining labor dynamics and economic sustainability. As older workers remain active longer and the population structure skews further toward seniors, Japan must innovate across public policy, social services, and workplace culture to maintain resilience in the face of demographic headwinds.

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Economic

Political

Trump Links Further U.S. Sanctions to European Action

Returning to the White House on September 14, Donald Trump stated that the European Union’s current sanctions on Russia are “not strict enough” and reiterated that the U.S. will not unilaterally intensify punitive measures unless its NATO allies take equivalent steps. Trump emphasized that European countries must stop purchasing Russian oil to present a united front and restore leverage in negotiations with Moscow.

Trump’s comments highlight a conditional stance: although he expressed readiness to proceed with more severe sanctions, he expects reciprocal commitment from NATO allies. “I’m ready to move forward, but they need to do the same,” he told the press. He further criticized Europe for "still talking, not acting."

Truth Social Post Calls for Unified NATO Embargo on Russian Oil

One day earlier, on September 13, Trump used his social media platform, Truth Social, to issue a statement titled “Letter to NATO and the World.” In it, he made clear that comprehensive sanctions from the U.S. would only be justified if all NATO members jointly agreed to ban Russian oil imports.

Trump argued that continued energy trade with Moscow by some NATO countries undermines the bloc’s bargaining power and creates a fragmented strategy. “Let me know when you’re ready,” he added, urging NATO to coordinate a timeline for cutting oil ties with Russia.

This reflects Trump's broader foreign policy approach, placing emphasis on cost-sharing, alliance parity, and synchronized action especially in matters of geopolitical conflict.

Proposes High Tariffs on Chinese Imports as Leverage Tool

In a notable addition to his Ukraine-Russia comments, Trump proposed that NATO impose a temporary 50%–100% tariff on goods imported from China. He claimed such a move would pressure Beijing to support an end to the conflict and act as a geopolitical lever. Trump promised that these tariffs would be lifted entirely once the Russia-Ukraine war concludes.

This approach introduces an interlinked strategy that goes beyond Russia, suggesting Trump views the Ukraine conflict not only as a European security issue but as a global economic power play where both Russia and China are interconnected actors in challenging Western dominance.

Moscow Responds with Familiar Defiance

Russia, for its part, continues to portray Western sanctions as illegitimate and ineffective. According to Kremlin spokesperson Dmitry Peskov, Moscow has developed a degree of "immunity" to sanctions and has adapted its economic infrastructure accordingly. Peskov labeled the sanctions a “double-edged sword” that negatively impacts not only Russia but also the economies of those who impose them.

The Kremlin reiterated its stated preference for a peaceful resolution, accusing Ukraine and its Western allies of sabotaging negotiation efforts. While these statements offer little new direction, they reinforce Russia’s strategy of projecting resilience and shifting blame for diplomatic stagnation.

Trump’s remarks signal a return to a transactional, alliance-dependent strategy in foreign policy one where U.S. actions are contingent on shared burden and unified execution. By demanding more aggressive sanctions from NATO and proposing broad tariffs on China, Trump is positioning himself as both a pressure agent and a coordinator of global strategy. Whether this approach gains traction among NATO members remains to be seen, particularly as internal economic pressures and divergent energy needs continue to challenge the bloc’s cohesion in its stance toward Moscow.

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Olivia Brooks

Stocks

Economic

China ruled that Nvidia Corp. violated anti-monopoly laws after concluding a preliminary investigation, ratcheting up the pressure on Washington during sensitive trade negotiations.

The US chipmaker was found in violation of antitrust regulations, the State Administration for Market Regulation said in a one-sentence statement, without elaborating. Nvidia’s shares fell 2.6% in pre-market trading.

The company has previously disclosed it’s facing scrutiny inside China, where regulators demanded it keep supplying local companies in return for regulatory approval of its acquisition of Mellanox. The company warned that it may face penalties in that case. Nvidia completed the purchase of Mellanox, a maker of networking technology, in 2020.

Source: Bloomberg Europe

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Economic

Unrecovered Costs, Not a Typical Loss

At the center of public scrutiny is a 44,000–45,000 billion VND discrepancy in EVN’s financials commonly misinterpreted as a “loss.” However, according to EVN’s leadership and the Ministry of Industry and Trade, this figure stems from an accounting mismatch: the input costs of electricity generation rose sharply, while the selling price remained fixed due to macroeconomic stabilization efforts in the wake of COVID-19.

EVN Deputy General Director Nguyễn Xuân Nam clarified that this was not a result of inefficiency or mismanagement but rather a policy-driven delay in retail electricity price adjustments. During 2022, the average production cost reached 2,032 VND/kWh, while the selling price was capped at only 1,800 VND/kWh leading to a shortfall of 149 VND/kWh across nearly 250 billion kWh of commercial electricity. In 2023, the gap narrowed slightly, with production costs at 2,088 VND/kWh and selling price at 1,953 VND/kWh, but the structural shortfall remained.

Global Energy Crisis and Import Dependence as Catalysts

The immediate cause of this cost imbalance lies in the global energy crisis, especially the aftermath of the Russia–Ukraine conflict. Input prices surged, with coal prices quadrupling and gas prices nearly doubling. Vietnam, a net energy importer for thermal fuel, faced an unavoidable spike in its generation cost base. Hydropower, Vietnam’s lowest-cost source, was already operating at near full capacity. As a result, EVN had to rely increasingly on more expensive power sources, such as imported LNG and renewable energy, whose feed-in tariffs can reach nearly 4,000 VND/kWh far exceeding the current selling price of 2,100 VND/kWh.

This creates a structural gap in the cost chain that no amount of short-term savings on operational or transmission costs could bridge.

Regulatory Oversight and Government Audits Reinforce Transparency

In response to public concern, EVN’s data for 2022–2023 was subjected to a specialized audit by the State Audit Office, which confirmed the transparency and integrity of the reported figures. Additionally, the Ministry of Industry and Trade organized multi-agency inspection teams including representatives from the Ministry of Finance, Labor and Social Affairs, and the Vietnam Fatherland Front to validate EVN’s production costs and ensure pricing compliance.

The oversight effort culminated in another audit in October 2024 that reaffirmed the non-monopolistic nature of EVN’s price-setting process. Unlike private enterprises, EVN operates under tight state supervision, with no autonomy to arbitrarily raise prices.

Temporary Measures Raise Long-term Reliability Concerns

To cope with this financial strain, EVN resorted to cutting operational and capital expenditures. Investment in grid maintenance, expansion, and system upgrades was deferred or scaled back. While this austerity helped ease short-term financial pressures, the Ministry of Industry and Trade warned that continued underinvestment in transmission and distribution infrastructure could degrade system reliability, increase overload incidents, and lead to more frequent outages.

This austerity-based coping mechanism is symptomatic of a broader misalignment between power system needs and regulatory delays in adjusting electricity prices to reflect true cost structures.

Call for Timely Price Adjustments and Structural Reform

The core issue is not inefficiency but a policy lag. Input costs fluctuate rapidly, especially under geopolitical shocks, but regulated selling prices remain static for extended periods. As Vietnam targets high GDP growth, the electricity grid must be scaled accordingly. This includes expanding infrastructure and ensuring fair compensation to power producers and retailers.

State officials emphasized that all cost components especially transmission and distribution, which currently only represent 16% of the price structure must be fully and promptly reflected in the retail electricity price. Delays in doing so place the entire system under financial and operational stress.

The 45 trillion VND in EVN’s balance sheet should not be seen as a conventional loss but rather a consequence of policy decisions to shield consumers and the economy during a volatile global energy crisis. While EVN has remained operationally efficient under pressure, sustained underpricing has introduced a long-term risk to grid reliability and investment flows. Moving forward, transparent, market-reflective pricing and structural reforms are critical to aligning Vietnam’s electricity sector with its economic growth ambitions.

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