Bring stock to a boil. Meanwhile, in a large saucepan, heat oil over medium heat. Add shallots and cook until soft, about 4 minutes. Add watercress and season with salt and pepper; stir to wilt. Add potatoes and hot stock, bring to a boil, and cook for 2 minutes. Reduce heat; simmer until potatoes are tender, about 8 minutes.
Purée soup in a blender until smooth. Stir in butter until melted and season to taste with salt and pepper.
Ladle soup into bowls and top each with a spoonful of crème fraîche and some chives. Serve immediately.
