ESMA, the EU’s market regulator, is starting a dedicated supervisory process aimed at how crypto custody providers manage operational risks. The move is designed to feed into the wider rollout of the EU’s Markets in Crypto-Assets (MiCA) framework, which has been entering its enforcement phase as regulators move beyond initial transition deadlines.

According to an ESMA announcement on Wednesday, the regulator is launching a Common Supervisory Action (CSA) that will specifically examine the digital operational resilience frameworks of crypto-asset service providers (CASPs), with custody services at the center of the review.

Key takeaways

• ESMA’s Common Supervisory Action will focus on operational resilience for custody activities, including how firms manage keys and stored crypto-asset custody.
• National competent authorities will run risk-based reviews of authorized CASPs across the EU from now through the first half of 2027.
• Supervisors are expected to assess governance, transaction controls, incident detection and response, and reliance on external service providers.
• ESMA plans to compile the national findings into a final report for its Board of Supervisors after the exercise ends in the second half of 2027.

Why ESMA is targeting custody resilience now

The timing matters. ESMA’s announcement comes shortly after the end of MiCA’s transition phase on July 1, which has shifted attention toward how firms will demonstrate compliance under the new EU rulebook. As regulators move from transitional arrangements to ongoing supervision, custody has become a particularly important area due to its direct role in safeguarding assets and the high operational and technological risks involved.

In its statement, ESMA said the CSA will assess the maturity of CASPs’ digital operational resilience frameworks as they relate specifically to custody activities. The regulator highlighted that reviews will include key and storage management—core components of most custody operations—along with other operational risk domains.

For market participants, this type of supervisory focus can be more than a compliance formality. Custody providers often sit between trading platforms, wallets, and end-users, meaning operational failures can propagate quickly across connected services. By evaluating resilience frameworks rather than only looking at formal authorization status, ESMA is signaling that the quality of operational controls will be a central supervisory concern.

How the Common Supervisory Action will work

ESMA said the supervisory action will be implemented by national competent authorities across the EU. Rather than performing a uniform check of all relevant firms, supervisors will conduct reviews using a risk-based sample of authorized CASPs.

The exercise is scheduled to run from now until the first half of 2027. During that window, regulators will examine how companies handle custody-related operational risks in practice. ESMA indicated that the reviews are expected to cover areas including:

• Key and storage management arrangements tied to custody operations
• Governance structures supporting resilience and operational control
• Transaction controls used to manage and safeguard custody processes
• Incident detection and response capabilities
• Dependencies on external service providers

This scope suggests a focus on both preventative controls and recovery readiness. In digital operational resilience frameworks, incident detection, escalation, and response planning are especially important because many custody threats are operational in nature—ranging from system outages and misconfigurations to disruptions affecting critical dependencies.

From national findings to an ESMA-level report

After national authorities complete their assessments, ESMA will consolidate results into a final report. The filing is intended for submission to ESMA’s Board of Supervisors after the exercise concludes in the second half of 2027.

While the CSA is being delivered through national regulators, the consolidation into an ESMA-level output matters for the industry. It helps create a more coordinated EU-wide view of whether operational resilience expectations are being met consistently across member states, and it may influence how supervisors follow up where weaknesses are identified.

Custody providers adapting to MiCA’s new phase

ESMA’s custody review also arrives as parts of the market continue to adjust to MiCA’s requirements. The source noted that some custody providers have begun supporting crypto platforms adapting to the evolving EU regulatory environment.

Earlier coverage cited in the material points to activity from BitGo: last month, the company launched a Europe-focused crypto-as-a-service platform intended to help platforms maintain access to the market while working through MiCA-related compliance requirements. While ESMA’s CSA is not framed as a response to any single firm or incident, it reflects the broader supervisory direction—ensuring that custody services meet operational resilience expectations under the MiCA framework.

For operators and users, the underlying message is straightforward: as MiCA transitions into full supervision, regulators will increasingly look at the operational substance of compliance, especially in areas that directly manage private keys, storage infrastructure, and the systems used to detect and respond to incidents.

As the CSA progresses, firms should expect follow-up scrutiny around governance, controls, and resilience testing—particularly where custody depends on external vendors or complex operational workflows. The key open question for the market is how consistently national authorities will apply the same supervisory expectations, and what themes will emerge once ESMA consolidates the findings later in 2027.

Coinbase-backed Layer-2 network Base is preparing to launch its new B20 token standard on mainnet, aiming to give developers a native way to issue stablecoins and other fungible assets such as tokenized real-world assets (RWAs). Base says the standard will be activated at 6 pm UTC, with developers able to start creating tokens under B20 once it goes live.

The rollout is positioned as a shift away from building and auditing custom token contracts. Instead, B20 provides an on-chain framework that supports issuer-side controls—features Base says are designed to simplify creation of both stablecoin- and asset-style tokens without developers having to implement their own token logic from scratch.

Key takeaways

• Base will enable the B20 token standard on mainnet at 6 pm UTC, according to Base documentation.
• B20 includes two variants—an asset format with configurable decimals and a stablecoin format with fixed six-decimal precision.
• The standard is intended to reduce developer workload by avoiding the need to build and audit custom ERC-20 contracts for common token functions.
• Base says B20 tokens remain compatible with ERC-20 while adding issuer controls such as supply limits and minting/burning permissions.
• The launch comes after recent Base outages tied to sequencer infrastructure issues, including incidents on June 25 and June 26.

What B20 changes for token issuance on Base

Base’s B20 standard introduces a built-in token framework meant to standardize how fungible assets are created and governed on the network. In Base’s documentation for the “launch B20 token” process, the network describes B20 as a native mechanism that developers can use to issue tokens for use cases such as stablecoins, RWAs, and tokenized equities.

Base also outlines how B20 supports two variants:

• Asset variant: allows decimals to be configured from six to 18.
• Stablecoin variant: requires a fixed six-decimal format and asks issuers to specify a fiat currency denomination (for example, US dollar or euro).

Base says developers can begin creating B20 tokens once the standard is activated. The goal is not just convenience, but operational consistency: rather than each project writing its own token contract and testing it, B20 is designed to bundle common token behavior into a standardized structure.

Built-in controls designed to replace custom ERC-20 logic

Beyond simple compatibility, Base says B20 tokens are designed with issuer controls that typically require custom contract logic in many token deployments. According to Base, B20 tokens are compatible with standard ERC-20 tokens, but they include additional mechanisms that issuers can configure and manage.

Base lists features under its issuer controls framework, including:

• Supply limits
• Transfer rules
• Minting and burning
• Pausing
• Transaction notes

For builders, the practical implication is that B20 could streamline token deployments for use cases where permissions and operational safeguards matter—especially for stablecoin-style issuances and regulated or semi-regulated asset tokenization models. For users, standardized issuer control behavior can also make it easier to reason about how tokens are administered, though the exact implementation details will still depend on each issuer’s chosen parameters.

B20 ties back to the Beryl upgrade

B20 was introduced as part of Base’s Beryl upgrade, which Base says went live on June 26. Base’s documentation attributes B20’s introduction to this upgrade cycle and frames it as part of broader network changes.

In addition to enabling B20 functionality, the Beryl upgrade also reportedly shortened withdrawal waiting periods from seven days to five days. Base also pointed to technical changes intended to improve network performance as part of the same upgrade.

That context matters because B20 is not an isolated feature drop—it arrives alongside changes designed to affect both user experience (withdrawals) and developer/building conditions (network behavior and token standard availability). In other words, the B20 launch is tied to a larger upgrade narrative rather than a standalone deployment.

Launch sequence after Base sequencer incidents

The timing of B20’s mainnet activation follows a period of operational disruption for Base, including outages linked to sequencer infrastructure.

On June 25, Base reported an outage caused by a consensus issue. At the time, the network said an invalid block had been sequenced, which prevented new blocks from being created. Base resumed block production on the same day after a nearly two-hour halt, as previously covered by Cointelegraph (Coinbase’s blockchain Base back online after 2-hour outage).

In a post-mortem, Base attributed back-to-back outages on June 25 and June 26 to a sequencer bug that triggered the first outage and then a second interruption following a reset-related race condition. The first incident reportedly lasted about 116 minutes, while the second lasted about 20 minutes after sequencers were unable to catch up following the reset.

Cointelegraph also reported on the post-mortem findings (Base post-mortem reveals sequencer bug behind back-to-back outages).

These incidents also intersected with upgrade timing. Base said the first outage occurred hours before the scheduled Beryl upgrade. The Beryl upgrade was later delayed by one day due to a B20 activation registry timing issue, showing that B20-related coordination was already present during this rollout window.

For participants monitoring Base’s ecosystem, the key question is how token-standard activation and network reliability interplay during upgrade periods. The B20 launch signals a push to expand functionality, but recent outages highlight that the underlying sequencer infrastructure—and the operational processes around upgrades—remains a critical factor for stability.

With B20 now set to activate at 6 pm UTC, developers and token issuers will be watching to see how quickly real stablecoin and RWA-related products adopt the standard, and whether Base’s recent sequencer incidents remain isolated as more activity moves onto the new framework.

Will the Fed focus on the breakevens, which are already at or below 2% at the short end, or on rising consumer concerns?

The Fed itself tends to trust breakevens because they reflect institutional capital allocation, while consumer surveys frequently lag behind and can be heavily influenced by volatile everyday costs like energy and food. Hence, the argument that falling breakevens are bullish for bitcoin still holds.

But the central bank may not entirely ignore Main Street sentiment, which can become self-reinforcing, especially if catalysts like energy prices remain volatile.

And guess what? The U.S.-Iran ceasefire has collapsed. The two sides exchanged airstrikes early today, triggering a roughly 5% jump in oil benchmarks. Bitcoin has fallen back to $62,000 and may drop further if the panic spreads to Wall Street later today.

Analysts are also watching the minutes from the Fed’s June meeting, due later today.

“Wednesday’s Fed minutes are the pin. With longs this crowded and funding this rich, a hawkish read is exactly the spark that flushes leverage, and the Strategy authorization hangs over every rally. We respect the bounce, we do not trust it, and we keep size honest into the minutes,” analysts at Marex said in an email.

Berachain is set to undergo a major protocol change this Wednesday that will reshape how the network pays incentives to participants. The upgrade, scheduled for 4:00 p.m. UTC, will retire the current Bera Governance Token (BGT) emissions and switch Berachain’s reward design to focus on its main BERA token via Wrapped BERA (WBERA).

In an announcement shared on Tuesday via the Berachain Foundation’s X account, the foundation said the hard fork will replace the network’s previous dual-token incentive structure. That model split incentives between transferable BERA and BGT, a governance asset that cannot be transferred. After the change, block rewards will be distributed as fixed WBERA amounts rather than BGT.

Key takeaways

• Berachain’s hard fork on Wednesday (4:00 p.m. UTC) will stop BGT emissions and end the dual-token incentive setup.
• Reward payouts will shift to WBERA block rewards, with the foundation describing the new design as simpler and more sustainable.
• WBERA emissions began on Tuesday, while BGT emissions are scheduled to be halted during the hard fork.
• Berachain’s foundation says APR may rise materially after the upgrade, but warned early yields could be volatile.
• Data tracking from CoinMarketCap and DefiLlama shows BERA and network TVL have recently been under pressure, suggesting activity remains subdued ahead of the change.

A shift from BGT to WBERA—and the mechanics behind it

The upgrade is designed to consolidate Berachain’s incentive system around WBERA, the wrapped form of its BERA token. According to the Berachain Foundation, the network will move away from BGT-based rewards and instead center incentives on staked WBERA (sWBERA), which it described as a more straightforward approach.

Before the upgrade, participants chasing higher yields reportedly had to work through several different reward pathways, including liquid staking mechanisms that were tied to BGT. The new plan reduces that complexity by changing what the network issues and how rewards flow.

Mechanically, the foundation outlined a two-stage transition. First, WBERA emissions started Tuesday. Then, at the scheduled time Wednesday, the hard fork will halt BGT emissions. In the days following the upgrade, the network will also phase out reward vaults and liquid staking incentives that are tied to BGT.

What it means for staking returns

Berachain’s foundation said the change could significantly improve yields, stating that annual percentage rates (APR) may triple after the upgrade. However, the foundation also cautioned that returns may swing during the first few days as the system settles into its new reward configuration.

For users, the practical implication is that the upgrade may initially produce short-term uncertainty even if the long-run incentive structure is intended to be more attractive. Traders and liquidity providers watching post-fork APR should expect the first window after Wednesday’s block transition to differ from the steady-state the foundation is aiming for.

Token performance and on-chain activity ahead of the fork

While Berachain prepares for the incentive overhaul, the market signal coming into Wednesday is not particularly strong. CoinMarketCap data cited in the coverage shows BERA was down about 7% over the 24 hours to 8:34 a.m. UTC. That move extends a broader slump in the token over the past year, bringing the decline to roughly 88%.

On the network side, DefiLlama data indicates Berachain’s total value locked (TVL) fell by $1.79 million, or about 3%, over the same 24-hour period. DefiLlama places the network around rank 37 by TVL, with approximately $56 million locked.

Activity metrics also point to a comparatively muted moment for the chain. Over the past 24 hours, the network generated $41 in chain fees and $3,359 in application revenue, while distributing $14,816 in token incentives. Together, these figures suggest that while incentives are currently being paid out under the existing model, overall utilization has not accelerated sharply ahead of the scheduled hard fork.

Why the “simpler” token economy matters

The foundation’s stated rationale is that the upgrade improves sustainability and reduces friction for users. In a dual-token system, participants often need to understand more than one asset’s role—especially when governance-related tokens like BGT are not freely transferable. By aligning incentives more directly with WBERA and emphasizing staked WBERA (sWBERA), the foundation is effectively trying to streamline how users participate and how rewards are structured.

That matters for investors and builders because incentive design can influence where liquidity concentrates. When reward logic is complex—especially when it involves multiple vaults and liquid staking pathways—capital can fragment across products and strategies. Streamlining rewards into a single centered asset may make it easier for users to evaluate positions and for liquidity to move as the network’s incentive targets shift.

At the same time, the transition introduces a period of adjustment. Since WBERA emissions started Tuesday and BGT emissions will stop only when the hard fork executes Wednesday, participants will be navigating a changing reward landscape on both days. This is especially relevant given the foundation’s own warning that yields could be volatile early on.

What remains uncertain is how quickly incentives will translate into measurable changes in on-chain activity—such as fees, application revenue, and TVL—after the upgrade. With recent data showing BERA and TVL trending downward, the post-fork period will be the real test of whether the new incentive system meaningfully boosts participation.

All eyes will be on Wednesday’s block upgrade and the days immediately afterward: whether APR stabilizes, how reward vault and liquid staking behavior changes as BGT-linked incentives are phased out, and whether chain usage improves enough to offset the current softness in TVL and token performance.

Key Highlights

• Base introduces B20 standard for native issuance of stablecoins, RWAs, and digital tokens.
• Developers can create tokens without deploying custom ERC-20 smart contracts.
• Built-in issuer controls include minting, burning, pausing, and transaction restrictions.
• Full ERC-20 compatibility ensures seamless integration with existing infrastructure.
• Deployment comes after Base sequencer disruptions and the Beryl network upgrade.

Base has unveiled its B20 standard on the mainnet, offering developers a streamlined approach to creating stablecoins, real-world assets, and fungible tokens. This protocol eliminates the requirement for custom ERC-20 contract deployment while introducing enhanced issuer management capabilities and preserving full ERC-20 compatibility.

Base Activates B20 for Streamlined Token Creation

Base deployed the B20 standard to its mainnet at 6:00 pm UTC, establishing a protocol-native framework for token issuance. This infrastructure enables developers to mint stablecoins, tokenized securities, real-world assets, and various fungible digital tokens.

The B20 protocol offers two distinct token configurations tailored to issuer requirements. Asset tokens accommodate decimal precision ranging from six to 18 places. Meanwhile, the stablecoin configuration defaults to six decimals and mandates fiat currency denomination.

Base engineered B20 with backward compatibility for existing ERC-20 infrastructure. Consequently, digital wallets, cryptocurrency exchanges, and blockchain indexers can integrate these tokens with minimal technical modifications. The standard additionally incorporates ERC-2612 permit capabilities for gasless approvals.

Enhanced Issuer Controls and Regulatory Features

The B20 architecture provides token issuers with comprehensive operational controls. Available management functions encompass token minting, burning operations, protocol pausing, supply caps, transfer restrictions, and transaction metadata. These features allow issuers to govern their assets through Base’s native infrastructure layer.

Previous Base technical documentation described an Issuer Toolkit designed for regulated asset creators. This toolkit delivers role-based access control alongside optional compliance mechanisms. It further accommodates asset freezing and seizure capabilities for jurisdictions with applicable regulatory requirements.

Base deployed B20 as part of the Beryl upgrade package, which launched on mainnet June 26. This upgrade simultaneously reduced Base-to-Ethereum withdrawal timeframes from seven days to five days. Additionally, the upgrade incorporated Reth V2 implementation to optimize node storage efficiency.

B20 Debut Comes After Sequencer Interruptions

The B20 standard launch arrives following two consecutive disruptions affecting Base’s sequencer operations. On June 25, an invalid block halted block production across the network. This incident persisted for approximately 116 minutes before Base engineers restored normal operations.

A subsequent outage materialized on June 26 when a system restart triggered a race condition. This technical issue prevented sequencers from synchronizing properly and lasted roughly 20 minutes. Base subsequently attributed both disruptions to sequencer software defects.

The first disruption occurred mere hours before the scheduled Beryl upgrade deployment. Nevertheless, Base postponed the upgrade by 24 hours due to an unrelated B20 activation registry timing conflict. Base clarified that the sequencer outage had no connection to the upgrade implementation.

Dunamu, the operator of South Korean cryptocurrency exchange Upbit, has been selected as the preferred bidder for the Korean National Police Agency’s one-year seized digital asset custody contract.

Procurement records published by South Korea’s Public Procurement Service showed that Dunamu ranked first in the bidding process for the project, which will transfer custody of cryptocurrencies seized during police investigations to an external institution. 

As the preferred negotiating bidder, Dunamu will secure the contract if negotiations are completed successfully without requiring talks with lower-ranked participants.

Dunamu leads technical and price evaluation

Scoring released through the procurement platform showed Dunamu receiving the maximum 10 points for its bid price and 84.73 points in the technical assessment, giving it a total score of 94.73. Korea Digital Asset Custody (K-DAC) placed second with 91.29 points, while Hecto Wallet One finished third with 87.27 points.

Valued at 267 million won (about $195,000), the contract will run for one year and cover the storage and management of digital assets confiscated by police during criminal investigations.

Industry participants, however, questioned whether the tender requirements made it difficult for smaller custody providers to compete. 

According to local media reports, the National Police Agency required bidders to immediately accept full custody of seized cryptocurrencies, maintain a round-the-clock response system, and guarantee full compensation if assets were lost due to hacking.

Several industry officials told local media that those conditions, while reasonable for safeguarding government-held assets, were easier for a large exchange operator such as Dunamu to satisfy than for standalone custody firms with fewer resources. 

One custody industry official said competing against a major exchange under those requirements “wasn’t an easy game from the start.”

Evaluation process draws criticism

Some market participants also expressed disappointment with the evaluation process itself. According to local media, an industry official said Dunamu was likely assessed favorably because of its experience operating a 24-hour exchange infrastructure and handling multiple digital assets, but added that a proposed on-site inspection of competing firms’ security systems and operating infrastructure was not included in the evaluation.

The National Police Agency rejected suggestions that the outcome favored a large company from the outset, with local media reporting that the agency said the operator had been selected through a fair competitive process.

The decision follows previous incidents involving the handling of seized cryptocurrencies by law enforcement agencies. Local reports noted that the need for an external custody provider gained attention after Bitcoin seized by the Gwangju District Prosecutors’ Office was lost, while police also later confirmed that seized Bitcoin had gone missing in a separate 2022 incident.

The latest development comes as Dunamu continues to navigate regulatory scrutiny on other fronts. Earlier this month, the company disclosed that the completion of its planned all-stock share swap with Naver Financial had been postponed for a second time until Dec. 31 as several regulatory approvals remain pending.

Key Takeaways

• Alibaba’s American Depositary Receipts climbed 11% in premarket sessions on Wednesday, reaching $109.38
• A pre-earnings analyst briefing revealed that the company’s instant-commerce division is experiencing reduced losses
• Hong Kong’s Hang Seng Tech Index surged approximately 5%, while Tencent and JD.com both gained around 4%
• South Korea’s KOSPI tumbled 5.4% as capital flowed away from semiconductor stocks including Micron and SK Hynix
• Nasdaq 100 futures declined 1.1% amid concerns over deteriorating U.S.-Iran cease-fire conditions

Alibaba’s American Depositary Receipts rocketed 11% to $109.38 during Wednesday’s premarket session, representing the stock’s most significant single-session rally in Hong Kong trading since September.

Alibaba Group Holding Limited, BABA

The driving force behind this surge was an analyst briefing conducted ahead of the company’s official earnings release. According to Chinese media outlet Jiemian News, Alibaba informed analysts that its rapidly expanding instant-commerce segment experienced narrowing losses during the June quarter, while the company maintained stable profitability across its operations. Market participants responded enthusiastically to these developments.

Shares traded in Hong Kong jumped as much as 12.5% during peak trading, positioning the stock among the strongest performers on the Hang Seng Tech Index, which rallied approximately 5%.

This wasn’t an isolated Alibaba phenomenon. JD.com climbed 3.8%, Baidu advanced 6.4%, and Tencent posted gains of nearly 4%. Chinese technology giants, which had underperformed throughout much of 2026, suddenly recaptured investor interest.

Capital Reallocation Dynamics

The larger narrative involves a meaningful shift in capital allocation patterns. Throughout recent months, artificial intelligence investment themes concentrated heavily on semiconductor manufacturers — especially South Korean companies like SK Hynix and American giant Micron. These equities fueled substantial gains in Korea’s KOSPI index and Taiwanese markets.

Wednesday reversed that trend dramatically. The KOSPI plunged as much as 5.4% as capital rotated away from chip-heavy markets. Micron declined 4.7%, while SK Hynix dropped 5.7%.

Market participants appear to be seeking more attractive valuations within the AI investment theme. Chinese internet companies, which had tumbled into bear market territory in Hong Kong, present lower price-to-earnings multiples compared to their elevated U.S. and Korean peers.

Contributing to the optimistic sentiment surrounding Chinese AI capabilities: Reuters disclosed that DeepSeek is developing proprietary chip technology to support AI infrastructure. The Information separately reported that Zhipu is evaluating the design of its own AI processors — indications that China’s artificial intelligence sector is advancing into hardware development.

American Technology Sector Faces Headwinds

While Chinese technology stocks attracted buying interest, American markets indicated weakness. Nasdaq 100 futures fell 1.1% after President Trump suggested the cease-fire arrangement between the United States and Iran may be unraveling. Rising oil prices unsettled investors across multiple sectors.

Alibaba’s ADRs had experienced significant pressure throughout 2026, declining 33% year-to-date prior to Wednesday’s rally. The weakness stemmed from investor anxiety regarding the company’s substantial expenditures on artificial intelligence infrastructure, including its Qwen large-language model, which management has positioned as a competitor to ChatGPT.

A Barron’s analysis published Monday contended that Chinese AI enterprises are strategically positioned to compete effectively, highlighting the comparatively low pricing of their chatbot services relative to offerings from OpenAI, Anthropic, and Alphabet.

Alibaba is scheduled to release comprehensive earnings results within the coming days. Wednesday’s preliminary briefing indicated that financial results, particularly regarding profitability metrics, may exceed conservative expectations.

The Hang Seng Tech Index had previously entered bear market territory earlier this year due to declining confidence in Chinese e-commerce operations and apprehensions about China’s macroeconomic conditions.