Global authorities tighten oversight on cryptocurrencies as the yen’s decline highlights underlying economic vulnerabilities

On Friday, Bitcoin prices dropped worldwide as the yen weakened to its lowest point against the dollar in ten months, while Canada moved forward with new stablecoin regulations, highlighting contrasting economic trends in Asia and North America. The cryptocurrency’s downturn occurred amid heightened market turbulence, with the yen’s slump and concerns over illegal financial activities drawing focus to the relationship between traditional and digital asset markets

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The yen’s decline, which set a new record low against the euro, has increased calls for the Bank of Japan (BOJ) to shift its monetary policy stance. In a Reuters survey of 81 economists, 53% predicted the BOJ would lift its short-term rate to 0.75% in December, a move considered vital to counteract inflation fueled by a weaker currency

. Prime Minister Sanae Takaichi, who supports expansionary measures, has advised a cautious approach to rate increases, but experts warn that the yen’s ongoing drop leaves little room for hesitation. “With the yen falling, there are worries about increased price pressures from imported inflation,” noted Takeshi Minami of Norinchukin Research .

Japan’s fiscal stimulus has added further complexity. The government approved a ¥21.3 trillion ($135 billion) stimulus package to spur growth, with officials pointing to increased regional export demand as a buffer against U.S. economic softness. This package, the largest since the pandemic, is intended to anchor inflation expectations and support the yen, with Finance Minister Katayama making verbal interventions

. Nonetheless, the offshore yuan and other Asian currencies continued to face downward pressure, highlighting the vulnerability of export-dependent economies in the region.

At the same time, Canada’s federal budget passed a significant milestone in Parliament, advancing legislation that designates the Bank of Canada as the regulator for stablecoins. The new framework mandates that stablecoin issuers hold reserves fully backed by high-quality assets, bans interest payments to users, and enforces strict cybersecurity and risk management protocols

. This approach aligns with U.S. laws targeting stablecoins tied to the dollar and reflects a global shift toward more rigorous oversight of digital assets. Lucas Matheson, CEO of Coinbase Canada, described the policy as “a positive move,” though he recommended further adjustments to address industry feedback .

These regulatory changes coincide with heightened attention to illegal crypto transactions. The UK’s National Crime Agency (NCA) uncovered a billion-dollar laundering operation linked to Russian military activities, which used banks in Kyrgyzstan to funnel money into the Ukraine conflict. Dubbed “Operation Destabilise,” the investigation revealed how proceeds from UK drug sales and stolen cryptocurrency were routed through shell firms and sanctioned banks to finance Russia’s defense sector

and . Authorities have made over 128 arrests, seizing £25 million in cash and crypto assets in the UK alone .

The NCA pointed out that such operations blur the boundaries between domestic crime and international politics. “There’s a direct link from someone buying drugs in the UK on a Friday night to global events causing suffering elsewhere,” stated deputy director Sal Melki

. The agency’s efforts to deter couriers—including Russian-language warnings at motorway service areas—emphasize the human risks in money laundering, where couriers receive only a small share of the potential gains .

As these factors converge, the yen’s future and Canada’s stablecoin regulations are expected to remain in the spotlight. The BOJ’s decision in December may challenge Japan’s ability to balance inflation management with economic growth, while Canada’s rules could become a model for global stablecoin oversight. Meanwhile, the UK’s clampdown on Russian-linked laundering networks highlights the expanding influence of cryptocurrency in both legitimate and illicit financial systems.