The Payments Newsletter including Digital Assets & Blockchain, January 2026

On 14 January 2026, the Hogan Lovells Digital Assets and Blockchain practice hosted a half‑day roundtable event for clients to discuss the FCA's trio of consultation papers: Consultation Paper 25/40 on Regulating Cryptoasset Activity; Consultation Paper 25/41 on Regulating Cryptoassets: Admissions & Disclosures and Market Abuse Regime for Cryptoassets; and Consultation Paper 25/42 on a Prudential Regime for Cryptoasset Firms. Take a look at this Our Thinking article for a high-level summary of what was discussed.

For more on the FCA's consultations, see the related item under ‘Regulatory Developments: Digital Assets' below.

We have also published this article explaining why firms should act now to understand the requirements of the new regime, prepare for authorisation, and position themselves for success in a regulated market: ‘UK cryptoassets regulation: What firms need to know and why early action matters'.

In December 2025, Hogan Lovells and TheCityUK shared their latest progress report, spotlighting the UK's journey towards digital capital markets.

The report provides a snapshot of the significant progress made against the recommendations in our earlier publication and highlights how industry and policymakers are moving from vision to action, particularly on digital bonds, digital payments, tokenisation, financial market infrastructure and the digital securities sandbox. However, there are still a number of areas that require priority action, if the UK wishes to retain its position as a world leading financial centre. Take a look at the key takeaways from the progress report here.

United Kingdom: High Court confirms PSR may cap cross-border interchange fees

On 15 January 2026, the High Court ruled that the Payment Systems Regulator (PSR) is within its rights to impose a price cap on cross-border interchange fees, finding in favour of the regulator against Revolut, Visa and Mastercard.

The parties sought to challenge the regulator's 2023 proposal to cap interchange fees following its finding that such fees had risen by a factor of five after Brexit.

The level of the cap and implementation date are yet to be decided, the PSR having delayed the decision until resolution of the judicial process.

United Kingdom: FCA finalises reforms to introduce greater flexibility for contactless payment limits

On 19 December 2025, the FCA published a press release confirming that it had finalised changes to introduce greater flexibility in how payment service providers (PSPs) set contactless payment limits. The reforms follow the FCA’s consultation earlier this year (CP25/24) and are implemented through FCA Instrument 2025/62, made on 18 December.

The amendments remove the existing regulatory limits under the SCA‑RTS and introduce a new risk‑based exemption, giving banks and other PSPs discretion to determine their own approach to contactless payments. The FCA emphasises that firms should consider enabling customers to set their own personal limits or disable contactless functionality entirely, reflecting practices already adopted by several high street banks. Existing protections, including reimbursement for unauthorised transactions, continue to apply. The FCA expects that increased flexibility will encourage improvements in fraud controls and strengthen consumer confidence.

The FCA also published Handbook Notice No.136, summarising consultation feedback and highlighting three key changes to the initial proposals:

• Delayed implementation: The effective date is pushed back by three months to 19 March 2026, allowing firms more time to transition and to prepare customer communications.
• Vulnerable customers: The FCA has strengthened guidance in its Payment Services and E‑Money Approach Document to highlight the need to consider customers with characteristics of vulnerability, alongside compliance with the Consumer Duty and existing guidance on fair treatment.
• Consumer‑set personal limits: The FCA has reinforced that PSPs should consider enabling customer‑defined limits and must communicate clearly when such options are available.

The rule change takes effect from 19 March 2026. Adoption of the new flexibility is optional, but firms choosing to implement it must proactively communicate changes in line with Consumer Duty expectations.

European Union: Council of EU agrees position on digital euro and measures to strengthen the role of cash

On 19 December 2025, the Council of the EU announced that it had agreed its negotiating mandate on two key legislative proposals: the introduction of a digital euro and clarifying the legal tender status of euro banknotes and coins. The Council's position will form the basis for upcoming negotiations with the European Parliament once the Parliament has adopted its own mandate.

The Council confirmed that the proposed digital euro would be issued by the European Central Bank and would function as a complement to, rather than a replacement for, cash. According to the Council's announcement, the agreed text aims to ensure strong privacy safeguards, offline usability, and measures to avoid financial stability risks, including limits on digital euro holdings.

Alongside this, the Council has agreed its position on strengthening the legal tender framework for cash, with the objective of ensuring that consumers retain effective access to cash and the ability to use it for payments. The proposal sets out requirements to ensure accessibility and acceptance of cash across the euro area, while allowing targeted exemptions in justified cases.

The announcement states that the Council's agreed positions mark the next step in the legislative process, enabling negotiations with the European Parliament in 2026. Formal adoption will follow once both institutions reach agreement on the final text.

India and New Zealand: Key trade provisions under newly concluded Free Trade Agreement

On 22 December 2025, it was announced that India and New Zealand had concluded negotiations on a new Free Trade Agreement (FTA). Among other things, the FTA introduces two core measures aimed at strengthening cooperation on digital payments infrastructure and financial technology innovation.

Firstly, both countries have committed to collaborate on electronic payments and real‑time transaction infrastructure, including supporting domestic payments interoperability and enabling real‑time cross‑border remittances and merchant payments through integrated Fast Payment Systems. This is intended to strengthen India's digital payments ecosystem by improving remittance flows, creating new market access opportunities for Indian payment service providers and drawing on India's established technological frameworks such as UPI and NPCI.

Secondly, the agreement includes dedicated measures on financial technology and regulatory innovation. India and New Zealand have agreed to enhance cooperation on financial services innovation, including mutual learning between their respective Regulatory Sandbox and Digital Sandbox frameworks for cross‑border applications. These provisions are designed to facilitate regulatory knowledge‑sharing, support India's ongoing sandbox initiatives and create opportunities for collaboration between Indian fintech firms and their New Zealand counterparts.

Negotiations were concluded in nine months, marking a significant step towards deeper economic engagement. Formal signing is expected in 2026.

United States: Federal Reserve seeks comment on prototype special‑purpose Payment Account

On 19 December 2025, the Federal Reserve published a Request for Information and Comment on a proposed “Payment Account” that eligible financial institutions could use for the limited purpose of clearing and settling their own payment activity. The Federal Reserve explains that this proposal responds to recent developments in the payments landscape and aims to support innovation while maintaining a safe and efficient payment system.

According to the Request for Information and Comment, a Payment Account would be distinct from a master account and subject to risk‑mitigating limitations designed to reduce potential exposure for Reserve Banks and the wider payment system. These limitations include:

• No access to credit, including no discount window availability;
• No interest paid on account balances;
• A cap on end‑of‑day balances, potentially set at the lesser of USD 500 million or 10% of the account holder’s total assets; and
• A strict prohibition on overdrafts, with any transaction that would create an overdraft automatically rejected.

The Federal Reserve emphasises that the prototype does not expand or change legal eligibility for accounts or services. Only institutions already legally eligible for a Federal Reserve Bank account under the Federal Reserve Act would be eligible to request a Payment Account. The account would be used exclusively for the institution’s own payment flows, and not for correspondent banking or settling payments on behalf of third parties.

The Federal Reserve states that comments will be accepted for 45 days following publication in the Federal Register.

Bangladesh: Central bank introduces strict reporting requirements for digital financial services

On 5 January 2026, it was reported that Bangladesh Bank (BB) has issued a circular mandating comprehensive monthly reporting for all licensed Mobile Financial Services, Payment Service Providers, Payment System Operators, and Utility Service providers. The new requirements aim to enhance transparency and oversight of Bangladesh's payment systems.

Under the regulations, institutions must submit detailed daily data on trust and settlement account balances, investments, funds in transit, e-money, and merchant liabilities. Reports must be filed with BB by the tenth day of the following month, using the prescribed template. BB has emphasised that institutions are solely responsible for timely and accurate reporting and non-compliance or inaccurate submissions are subject to penalties.

The circular is effective immediately.

Philippines: House of Representatives approves bill to amend Bank Secrecy Law

On 22 December 2025, it was announced that the House of Representatives of the Philippines unanimously approved on a third and final reading a bill to amend the Bank Secrecy Law. The measure, House Bill 6707, aims to combat tax evasion, money laundering, and other financial crimes, and to align the Philippines with international standards on financial transparency.

The bill allows the Bangko Sentral ng Pilipinas (BSP) to examine bank deposits under strict and limited conditions, specifically when there is reasonable suspicion of unlawful activity or in the course of investigating closed banks. The reforms are designed to remove barriers to the effective investigation and prosecution of corrupt or illegal financial actions by stockholders, owners, directors, trustees, officers, or employees of BSP-supervised institutions.

Key features include:

• The BSP may inquire into or examine deposits when there is reasonable ground to believe that fraud, serious irregularity, or unlawful activity has been committed.
• The results of such examinations are limited in use to the BSP, the Securities and Exchange Commission, the Philippine Deposit Insurance Corporation, the Anti-Money Laundering Council, the Department of Justice, and the courts.
• The bill provides a safe harbour clause exempting banks and their personnel from liability for acts done in compliance with an official order of inquiry or examination.
• The definition of “deposits” is clarified to include all obligations of a bank that form part of its deposit liabilities under BSP rules.

The bill will proceed to the Senate for further deliberation before it can be enacted into law.

Australia: Government consults on expanding fintech sandbox to boost innovation

On 17 December 2025, the Australian Treasury published an independent review and public consultation on the Enhanced Regulatory Sandbox, responding to concerns about low uptake and limited scope. The Enhanced Regulatory Sandbox, introduced in 2020 and overseen by the Australian Securities and Investments Commission, was designed to allow businesses to test innovative financial services and credit activities without the need for a full licence. However, feedback from industry stakeholders has highlighted challenges with eligibility, the range of permitted activities, and the duration of exemptions.

The government is now seeking input on proposals to broaden the types of financial services and products eligible for sandbox testing, streamline application processes, and improve support for startups and smaller firms. The review will also consider how the sandbox can be better aligned with upcoming federal regulatory reforms and Australia's broader digital asset roadmap.

The review will deliver recommendations to the government by mid-May 2026. Interested parties are invited to submit feedback by 6 February 2026, with further consultations planned in early 2026. 

Indonesia: Regulatory framework finalised for BNPL sector

On 23 December 2025, it was reported that Indonesia's Financial Services Authority (OJK) had finalised a new regulatory framework for the Buy Now, Pay Later (BNPL) sector under the Financial Services Authority Regulation Number 32 of 2025 on the Provision of Buy Now Pay Later (BNPL) Services. The Regulation requires BNPL providers to obtain an operating licence from the OJK and introduces stricter standards for risk management, consumer protection, and data security.

The new framework is intended to address rapid growth and emerging risks in the BNPL market. Further details are expected once the OJK publishes the official Regulation.

United Kingdom: Open Banking – FCA and PSR update on delivery of commercial VRPs (cVRPs) and UK Finance industry-led proposal for sustainable commercial model for Wave 2 cVRPs

On 16 December 2025, the FCA (as lead regulator for open banking) and the Payment Systems Regulator (PSR) published a report and related FCA news story providing an update on the development and rollout of variable recurring payments (VRPs), which now account for 16% of all open banking transactions. API performance statistics for open banking were also published, showing a 53% year-on-year growth in open banking payments overall. Some key points are as follows:

• With industry, the FCA/PSR have supported work to extend VRPs to greater commercial use, as part of the calls from the National Payments Vision (NPV) to develop a strong and competitive open banking market in the UK, and quickly roll out VRP to ‘phase 1’ use cases (including utility payments, financial services payments, and payments to local and central government).
• The UK Payments Initiative (UKPI) – a new company formed by 31 firms to enable VRPs - will operate a commercial VRP (cVRP) scheme, enabling consumers to make flexible, recurring payments to businesses such as utility providers. These services are already helping customers with irregular incomes to manage payment schedules more effectively. This scheme will enable a larger group of customers and businesses to access these services.
• The first live payments under the UKPI scheme are expected in Q1 2026, signalling the start of a new era for payments and open banking in the UK.
• Over 2026, the FCA/PSR will continue to support industry in the rollout of VRPs.
• HM Treasury is expected to introduce legislation in 2026 that will grant the FCA new powers to set open banking rules, and the FCA plans to consult on new rules for the long-term regulatory framework before the end of 2026. As part of that work, the FCA will continue to liaise with the CMA and government to ensure the long-term regulatory framework provides clarity on commercial models for open banking payments. The framework will be the foundation for expanding cVRPs into e-commerce and wider use cases. It will let industry drive open banking forward, and unlock the potential for new use cases that contribute to innovation and competition. The FCA will factor in the lessons learned from the Phase 1 cVRPs rollout.

Annex A to the report contains 15 guiding principles for target state for the open banking market, developed and agreed by industry representatives. They include that:

• Some level of brand / Trustmark / nomenclature standardisation and consistency is a critical prerequisite for open banking payments to become a ubiquitous method with high market adoption;
• Open banking decisions today should set the foundations for open finance – reducing burden on investment, duplication of effort, data sharing extensibility and interoperability where possible; and
• The FCA should have oversight of open banking participants and schemes and set guardrails for industry.

On 8 January 2026 UK Finance, supported by Deloitte, published a report presenting an industry-led proposal for a sustainable commercial model for Open Banking Payments (OBPs) in e-commerce – also referred to as Wave 2 cVRPs. UK Finance explains that UKPI is expected to use this proposal to inform its decisions on the Wave 2 cVRP commercial model, and the content of the report will be open to any other operator or stakeholder who could benefit from the analysis.

United Kingdom: FCA publishes letter setting out next steps on future entity for open banking

On 16 January 2026, the FCA published a letter (dated 19 December 2025) addressed to trade associations setting out its proposed next steps for the development of a future entity for UK open banking. The future entity will be the primary standard-setting body for open banking APIs in the UK.

The FCA's next step following its August 2025 feedback statement on the design of the future entity is to establish the future entity. It asks industry participants to engage with organisations interested in the role of future entity and to decide which option they believe should lead the next phase of work. It would prefer firms to agree on a single proposal and invites market participants to express their views no later than 30 January 2026.

To help with the decision process, the FCA will commission an independent consultant-led assessment of the proposals, or of the single supported proposal if industry agrees on a single potential body. As it will be the regulator of the future entity, the FCA will also provide its view on the suitability of any proposal. The FCA expects this process to begin in February 2026 and that a formal decision will be made on which organisation becomes the future entity at a later date.

In addition, the FCA will convene a short programme of roundtables to enable firms to share views and new information. It is also inviting those bodies interested in leading the establishment of the future entity to contact it directly to arrange a one-hour Q&A session ahead of the launch of the independent consultancy process.

United Kingdom: FCA and PSR publish joint statement on variable recurring payments

On 20 January 2026, the FCA and the Payment Systems Regulator (PSR) published a joint prioritisation statement on enforcement in relation to commercial variable recurring payments (cVRPs) as part of their open banking work.

In a letter to the Competition and Markets Authority (CMA) dated 15 January 2026, the FCA and the PSR explain that they have been engaging with the UK Payments Initiative (UKPI), the new organisation created to own and operate a multilateral framework for cVRPs. UKPI is currently developing a centralised "access fee" pricing model for cVRPs.

The joint prioritisation statement confirms that the FCA and PSR will not, at this stage, prioritise investigations under Chapter I of the Competition Act 1998 (CA 1998) in relation to specific pricing arrangements concerning UKPI's cVRP scheme. Given the government's National Payments Vision and forthcoming legislative framework, the FCA and PSR do not consider that prioritisation of a Chapter 1 CA 1998 investigation into these arrangements would currently be warranted.

In a letter dated 16 January 2026, the CMA confirmed to the FCA and PSR that it does not intend to take a different position on the prioritisation of these investigations.

The prioritisation statement is a temporary measure pending the government's anticipated legislative framework under the Data (Use and Access) Act 2025 or other relevant legislative mechanism. The statement applies until the earlier of that framework being in place or July 2027.

In the meantime, the FCA and the PSR will continue to monitor market developments and review any changes to the pricing methodology. They expect UKPI to share its final governance documentation with them as soon as it is approved and they may reconsider their non-prioritisation position if the conditions set out in the statement and its annex are not appropriately reflected.

The annex to the statement sets out full details of the pricing arrangements covered by the statement, including relevant conditions and safeguards.

United Kingdom: Final report of HM Treasury's independent review of Payment and Electronic Money Institution Insolvency Regulations 2021 published

On 16 December 2025, the final report of HM Treasury's independent review of the Payment and Electronic Money Institution Insolvency Regulations 2021 was published.

The report identifies several key issues with the Payment and Electronic Money Special Administration Regime (PESAR), in particular the absence of a clear hierarchy among the three statutory objectives, creating uncertainty over priorities. It highlights:

• significant delays in returning funds to customers;
• gaps in consumer protection (given the lack of anything equivalent to the Financial Services Compensation Scheme (FSCS)); and
• the requirement for court entry and court approval of distribution plans causing unnecessary delays and additional costs.

The report recommends targeted reforms rather than an overhaul of the PESAR. These include:

• prioritising business rescue and customer transfers above the other PESAR statutory objectives, where appropriate;
• an out-of-court route into special administration;
• alternatives to court approval of distribution plans;
• FSCS-style protection for customers; and
• contingency planning for the insolvency of large-scale failures, with a focus on cross-border recognition of PESAR appointments.

The government is considering the review's recommendations.

United Kingdom: PSR consults on proposed directions on remedies relating to market review of card scheme and processing fees

On 19 December 2025, the Payment Systems Regulator (PSR) launched a consultation on proposed directions relating to remedies to address the issues it identified during its market review of card scheme and processing fees. This follows an earlier consultation on potential remedies in April 2025.

The PSR has decided to implement remedies relating to information, transparency and complexity and to pricing governance and is now consulting on the detailed form of the directions it plans to make. It has published two draft specific directions to Mastercard and Visa on measures to improve information transparency of scheme and processing fees charged to acquirers and on pricing governance. In addition, the PSR has decided to introduce a remedy relating to regulatory financial reporting and expects to consult on a draft direction for this by 31 March 2026.

The consultation closes on 13 February 2026.

European Union: EU MoU on access by non-bank PSPs to central bank operated payment systems published

On 18 December 2025, the EBA published a memorandum of understanding (MoU) that it has agreed with the European Central Bank (ECB), national central banks (NCBs) and national supervisory authorities (NSAs) in the EEA on the co-operation framework for information sharing in support of the access of non-bank payment service providers (PSPs) to central bank operated payment systems. A related EBA press release has also been published.

European Union: EBA and ECB publish joint report on payment fraud trends under PSD2

On 15 December 2025, the EBA and the ECB published their 2025 joint report on payment fraud, assessing fraud levels and authentication trends across the European Economic Area (EEA) and evaluating the continued effectiveness of strong customer authentication (SCA) introduced under PSD2.

Covering semi‑annual data from 2022 to 2024, the report reviews fraud patterns across major payment instruments, including credit transfers, card payments, direct debits, cash withdrawals and e‑money transactions. It notes that SCA remains highly effective for mitigating the forms of fraud it was designed to address — particularly card‑payment fraud — and has contributed to maintaining an overall EEA fraud rate of approximately 0.002% of total transaction value. Nonetheless, total fraud losses rose from EUR 3.5 billion in 2023 to EUR 4.2 billion in 2024, driven by shifts in fraudster behaviour and growing cross‑border exposures.

Among the key findings were the following points:

• Although SCA‑authenticated transactions were significantly less susceptible to fraud, card‑payment fraud was 17 times higher when the payee was located outside the EEA where SCA does not apply, underscoring persistent vulnerabilities in cross‑border transactions.
• Fraudsters increasingly rely on manipulation‑based techniques, such as tricking users into authorising fraudulent transactions, and exploit SCA exemptions, particularly in credit transfers, where losses reached EUR 2.2 billion in 2024 (a 16% year‑on‑year increase).

The report emphasises that while PSD2’s SCA requirements remain effective for their intended purpose, supervisors, payment service providers and market participants must adapt controls to address emerging fraud risks. It encourages continued enhancement of fraud‑monitoring capabilities, closer scrutiny of SCA‑exempt transactions and greater coordination across the EEA to counter increasingly sophisticated fraud schemes.

United States: FDIC proposes first stablecoin application framework under the GENIUS Act

On 16 December 2025, the U.S. Federal Deposit Insurance Corporation (FDIC) approved a notice of proposed rulemaking that would introduce the first federal application process for issuing payment stablecoins under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).

The proposal sets out how subsidiaries of FDIC supervised insured depository institutions may apply to become permitted payment stablecoin issuers (PPSIs). Under the proposal, applications must address the statutory factors under the GENIUS Act, including details of the stablecoin's structure, reserve arrangements, governance, financial resources, and risk‑management controls. The FDIC will determine whether an application is “substantially complete” within prescribed timeframes before issuing a final decision, which must be made within 120 days.

The FDIC described this proposal as the first step in implementing the GENIUS Act, with further regulations to establish capital, liquidity, governance and risk‑management standards for PPSIs expected to follow throughout 2026 as the federal stablecoin regime takes shape.

Comments on the proposal are due by 17 February 2026.

United Kingdom: Statutory Instrument on cryptoassets laid before Parliament

On 15 December 2025, HM Treasury laid the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 before Parliament, setting the foundation for the UK’s comprehensive regulatory regime for cryptoassets. The statutory instrument (SI) follows substantial industry feedback on the draft that was issued in April and marks a key step towards bringing cryptoassets fully within the FSMA framework.

The SI sets out a wide range of rules, touching on the following key themes:

• Designated activities regime: Certain activities relating to qualifying cryptoassets (including issuing them and operating cryptoasset platforms) will become designated activities, which means firms must seek authorisation under FSMA to engage in those activities and comply with FCA rules when undertaking them.
• Disclosure and liability requirements: Certain firms will be required to publish a qualifying cryptoasset disclosure document, detailing key characteristics, governance arrangements, risks, and conflicts of interest. Those responsible for disclosures may be held liable for untrue or misleading statements, with compensation available to investors who suffer loss.
• Market abuse regime: A crypto specific market abuse framework is introduced, mirroring that applicable in traditional regulated markets. Insider dealing, unlawful disclosure of inside information and market manipulation will apply to qualifying cryptoassets, and firms will be required to maintain insider lists and implement systems and controls to detect and prevent misconduct.
• Stablecoin issuance as a regulated activity: Issuing qualifying stablecoins becomes a regulated activity requiring FCA authorisation. Issuers must meet new requirements, including providing disclosures on the mechanisms used to maintain stable value, whether based on reserve assets, algorithmic stabilisation or a combination of approaches.

The regime is scheduled to take effect on 25 October 2027, with transitional provisions enabling the FCA to determine an application period and set expectations for firms that secure, or fail to secure, the required permissions in time.

For further information on this development, see this Our Thinking article.

United Kingdom: FCA publishes wide ranging consultation package on the future UK cryptoassets regime

On 16 December 2025, the FCA published three significant consultation papers – CP25/40, CP25/41 and CP25/42 – setting out detailed proposals for the UK’s forthcoming regulatory regime for cryptoassets as part of the FCA's efforts to obtain industry views on key matters ahead of a more comprehensive set of rules. The consultations follow HM Treasury’s laying of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 before Parliament (see the above item).

CP25/40 – Regulating cryptoasset activities

This consultation sets out the FCA’s proposed rules and guidance for firms undertaking regulated cryptoasset activities, including operating cryptoasset trading platforms (CATPs), providing intermediation services, facilitating lending and borrowing, offering staking, and certain decentralised finance (DeFi) arrangements.

• A major focus of the consultation is the regulatory framework for CATPs. CATP operators serving UK clients will require FCA authorisation and must have a UK presence. The FCA indicates that overseas firms wishing to serve UK retail clients will also need a UK legal entity, while overseas CATPs serving only UK institutional clients may be able to rely on limited exemptions. The FCA plans to consult on separate guidance for international firms in Q1 2026.
• The consultation also expands on platform operation and access standards, transparency record keeping and reporting and settlement arrangements.
• CP25/40 proposes bringing staking within the scope of regulated cryptoasset activities. The FCA views staking as higher risk and applies enhanced safeguards, including clear risk disclosures, express informed client consent, and compliance with financial promotions and product governance rules.
• CP25/40 does not propose a bespoke regulatory framework for DeFi. Instead, DeFi arrangements will fall within the UK cryptoasset regulatory perimeter where there is a clear controlling person who carries on one or more of the new regulated cryptoasset activities.

This Our Thinking article highlights some further key takeaways from this consultation paper.

CP25/41 – Admissions, disclosures and the market abuse regime for cryptoassets

CP25/41 sets out the FCA’s proposed framework for admissions and disclosures (A&D) and a dedicated market abuse regime for cryptoassets (MARC). The consultation follows earlier work under FCA DP24/4.

• The FCA’s aim for the A&D regime is to strengthen consumer protections through higher quality disclosures, reduce scams, and remove or limit low quality tokens from entering UK retail markets.
• Taken together with A&D measures, MARC is intended to bring insider dealing, unlawful disclosure and market manipulation within a regulatory framework similar in purpose to that applied in traditional markets, but adapted for the features of cryptoassets. Proposals include rules on public disclosure of inside information, legitimate market practices, maintaining insider lists, and requiring CATPs and intermediaries to have systems and controls to detect and disrupt abuse.

Take a look at this Our Thinking article for more details.

CP25/42 – A prudential regime for cryptoasset firms

The FCA is also consulting on prudential requirements for all cryptoasset firms that will be authorised under the new regime.

• CP25/42 proposes a system combining permanent minimum capital requirements, fixed overhead requirements and new “K factors” tailored to cryptoasset activities, such as client orders, trading flows, staking exposures and counterparty risks.
• The framework draws from the prudential model used for investment firms, with adjustments to reflect the risk profile of cryptoasset businesses and ensure adequate financial resources and robust risk management.

For further background on this consultation, see this Our Thinking article.

The consultations close on 12 February 2026, after which the FCA intends to issue policy statements setting out final rules during 2026.

On 8 January 2026, the FCA also published a series of webpages on the new regulatory regime. The pages explain the new cryptoasset regulated activities, expected FCA standards and the FCA’s approach to authorisation, supervision and enforcement. They also outline how the authorisation gateway will operate and describe the transitional provisions that will allow certain firms to run off existing contracts if they do not secure authorisation in time. The new regime goes live on 25 October 2027, but the FCA will open the application window (referred to as the ‘application period’) well before then, with the current plan to open the application window in September 2026. For more on this development, take a look at this Our Thinking article.

United Kingdom: FCA announces Stablecoin Sprint events in 2026

On 15 January 2026, the FCA published details of a planned Stablecoin Sprint comprised of:

• A Sprint event in March 2026 to help to shape policy and set standards for the future of payments, focusing on: retail payments, cross-border payments, e-commerce and business-to-business (B2B) transactions, and remittance; and
• A trade payments roundtable in May 2026 which will focus on B2B and trade finance applications and related payment flows (domestic and international).

Firms who are interested in taking part are required to complete an application form by midnight on 4 February 2026. The FCA will let firms know whether they have secured a place at the Stablecoin Sprint and / or roundtable by 13 February 2026.

The FCA aims to draw on insights from the stablecoins cohort in its Regulatory Sandbox and consultation feedback in relation to CP25/14, CP25/15, CP25/25 and CP25/41 (as to which, see the above item) to finalise rules for stablecoin issuers by mid-2026.

Hong Kong: Regulators finalise virtual asset dealer and custodian regimes and move to broaden crypto rules with new licensing frameworks

On 24 December 2025, the Hong Kong Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) jointly published the consultation conclusions on their proposed licensing regimes for virtual asset (VA) dealers and VA custodians. The conclusions confirm that Hong Kong will proceed with legislative proposals to introduce dedicated licensing frameworks for both activities, each designed to strengthen investor protection and operational standards across the sector. 

Alongside finalising the dealer and custodian regimes, the FSTB and SFC launched a further consultation on new licensing requirements for VA advisory and VA asset management service providers. The consultation proposes to implement licensing regimes to regulate VA advisory and VA management services separately, following the “same business, same risks, same rules” principle, and would allow the SFC to supervise advisory and management activities in a manner consistent with requirements applicable to similar services in traditional securities markets. Comments on this further consultation were invited until 23 January 2026. 

The regulators describe these steps as completing the core pillars of Hong Kong's virtual asset regulatory framework and maintaining its position as an international hub for responsible innovation. 

South Korea: Press report indicates delay to long‑awaited crypto law over stablecoin issuance rules

On 30 December 2025, it was reported that South Korea's long‑anticipated digital asset legislation has been delayed due to disagreements over which entities should be permitted to issue stablecoins. According to the report, lawmakers have been unable to reach consensus on whether issuance should be restricted to banks and regulated financial institutions or whether licensed private sector issuers should also be allowed.

The delay means that the legislative package – expected to establish comprehensive rules for exchanges, custodians and stablecoin issuers – will not progress until policymakers resolve the question of permissible issuers.

No revised timeline for passage of the legislation has yet been indicated.

Turkmenistan: New law legalises crypto mining and exchanges

It has been reported that on 1 January 2026 Turkmenistan regulated cryptocurrency mining and the operation of crypto exchanges, following the signing of the country's new Law on Virtual Assets. The legislation brings digital assets within Turkmenistan's civil law framework for the first time and establishes a licensing regime overseen by the central bank.

According to reports, under the new framework, individuals and companies may conduct mining activities provided they meet registration and technical requirements. Licensed exchanges will also be permitted to operate, subject to strict KYC and anti‑money laundering controls. However, digital assets will not be recognised as legal tender and cannot be used for everyday payments or treated as currency within Turkmenistan.

Russia: Central bank unveils new crypto framework to be adopted in 2026

On 23 December 2025, Russia's central bank published a proposed regulatory framework that would regulate cryptocurrency trading for individuals and institutions from 2026. According to the announcement, the rules recognise digital currencies and stablecoins as “monetary assets” that can be bought and sold, but they will remain prohibited for domestic payments.

Under the proposal, retail investors would be permitted to purchase cryptoassets through licensed intermediaries, subject to an annual cap of 300,000 rubles and a mandatory risk‑awareness test. Qualified investors would face no volume limits but would still be required to meet knowledge‑assessment requirements. Privacy‑focused cryptocurrencies that conceal transaction data are not permitted.

The framework also provides a legal basis for existing financial institutions to offer crypto services under current licences and introduces rules for custodians and wallet providers. In a significant change of policy, the central bank indicates that residents will be allowed to acquire crypto abroad via foreign accounts and subsequently transfer those assets to licensed domestic platforms, subject to tax reporting obligations.  

Europe: Monzo secures a full European banking licence

On 17 December 2025, it was reported that Monzo had secured a full banking licence from the European Central Bank and the Central Bank of Ireland, allowing the UK‑based digital bank to operate as an authorised credit institution across the EU. The licence supports the establishment of Monzo's Dublin office as its European headquarters, with Irish IBAN accounts to be made available first.

The development represents Monzo's first major expansion into the European banking landscape following significant domestic growth. 

United Arab Emirates: FAB and Mastercard launch virtual corporate cards

On 22 December 2025, it was reported that First Abu Dhabi Bank and Mastercard have launched a mobile‑first virtual corporate card solution, enabling UAE businesses and government entities to issue and manage virtual card numbers directly within digital wallets.

The initiative reflects rising demand for hardware‑free corporate payments infrastructure in the region. By removing reliance on hardware‑based terminals and traditional plastic cards, FAB and Mastercard aim to simplify procurement and expense management for organisations while strengthening payment security and supporting the region's shift towards digital business payments.

India: Google Pay launches digital credit card

On 18 December 2025, it was reported that Google Pay had announced the launch of Flex, a fully digital, RuPay‑powered credit card issued initially with Axis Bank and designed to operate entirely within the Google Pay app. Users can apply digitally, earn instant rewards and convert repayments into equated monthly instalments (EMIs).

The launch positions Google Pay to expand its role in India's consumer‑credit ecosystem, where UPI (India's instant payment system) adoption is high but use of credit products remains low. 

Egypt: ABK‑Egypt partners with Mastercard to advance digital innovation

On 11 January 2026, Al Ahli Bank of Kuwait – Egypt (ABK‑Egypt) announced a strategic collaboration with Mastercard to expand its consumer, commercial and digital payment capabilities across the Egyptian market. Under the partnership, Mastercard will provide ABK‑Egypt with advanced digital solutions designed to simplify payment processes, enhance security and support seamless transactions for both individuals and businesses.

The initiative forms part of ABK‑Egypt's broader digital transformation strategy and supports Egypt's national objective to reduce reliance on cash.

Africa: Flutterwave acquires open banking firm Mono

On 5 January 2026, it was reported that Flutterwave, Africa's leading payments technology company, has acquired Mono, an African open banking infrastructure provider offering APIs for bank data access, identity verification and account‑to‑account payments.

The deal reflects a broader trend in African fintech towards interoperable, account‑based payment infrastructure.

Ecuador: COONECTA partners with BPC to modernise cooperative banking

On 20 December 2025, it was reported that COONECTA had confirmed its partnership with BPC to deploy the SmartVista platform across 90 credit unions and 75 member institutions in Ecuador, consolidating card issuing, acquiring, mobile banking and digital wallet services. The rollout includes real‑time fraud prevention and support for international debit and credit cards.

The initiative aims to modernise Ecuador's cooperative financial ecosystem, particularly in underserved rural regions. By introducing a unified, scalable digital payments infrastructure, COONECTA is positioned to broaden access to financial services and improve operational efficiency across the sector.

Global: Interchecks and Mastercard enhance A2A payments through Open Finance

On 17 December 2025, Interchecks and Mastercard announced a partnership integrating Interchecks' Pay‑by‑Bank solution with Mastercard's Open Finance verification capabilities to support automated clearing house (ACH)‑based account‑to‑account payments. The collaboration targets recurring billing, subscription payments and account funding.

It aims to reduce failed payments, improve verification and expand adoption of account-to-account  payments across sectors.

Dubai: Visa expands its Global Travel Program

On 15 December 2025 Visa announced the expansion of its Global Travel Program, with Dubai joining London and Paris as flagship destinations offering curated hospitality, retail and entertainment benefits to Visa cardholders. The expansion follows a surge in visitor spend patterns identified through VisaNet data.

The initiative responds to rising demand for premium, card‑linked travel experiences. 

Europe: Aspire receives EU EMI licence

On 16 December 2025, Singapore‑based fintech Aspire announced it had secured an EU Electronic Money Institution (EMI) licence and had selected the Netherlands as its European headquarters. The licence enables Aspire to offer regulated business accounts, payments, cards and expense tools across the EU.

The approval marks a significant milestone in Aspire's global expansion and strengthens its ability to serve cross‑border SMEs.

Africa: Orange Money partners with Visa across Africa

On 17 December 2025, Orange Money and Visa announced an expanded partnership to roll out virtual Visa cards across multiple African markets following initial deployments in Botswana, Madagascar, Jordan and Côte d'Ivoire. Users can create and fund virtual cards via an app for secure domestic and international online payments.

Further market launches are planned as the partners aim to broaden acceptance and digitise everyday transactions.

Global: Worldpay collaborates with ekko on sustainable payments

On 16 December 2025, Worldpay announced a partnership with sustainability platform ekko to embed carbon footprint insights and optional charitable donations into checkout experiences for merchants across EMEA. The integration allows consumers to view the environmental impact of each transaction.

The initiative responds to rising retailer and consumer interest in sustainability‑linked payment features. 

United Kingdom: Sling Money gains UK FCA approval after MiCA licence

On 24 December 2025, it was reported that Sling Money, a digital currency payment app, had received approval from the FCA to operate as a crypto services provider, following an earlier MiCA licence from the Dutch regulator. The Sling Money app allows users to send and receive Paxos' dollar stablecoin, USDP, and Circle Internet's euro equivalent, EURC on the Solana blockchain, link bank accounts, and access instant local currency withdrawals across supported markets.

The approval expands Sling's European footprint as stablecoin‑based payment models gain traction. 

Global: Deutsche Bank supports PayPal with expanded payments partnership

On 13 January 2026, Deutsche Bank announced an expansion of its long‑standing partnership with PayPal to enhance merchant settlement, payouts and withdrawal services across the U.S., with additional support in Europe and APAC. The collaboration builds on significant annual processing volumes already handled for PayPal.

Commenting on the expansion, the Global Co‑Head of Corporate Bank at Deutsche Bank emphasised that the expansion underscores both institutions' long‑standing relationship and their shared commitment to innovation.

Global: Mastercard partners with Google on open protocol enabling interoperability between AI agents and merchants

On 20 January 2026, Mastercard announced that it has partnered with Google on its Universal Commerce Protocol, an open protocol that enables interoperability between AI agents and merchants.

Mastercard explains that protocols like these are essential to scaling agentic commerce, which is why it continues to collaborate across the value chain, including Google's Agent Payments Protocol and Agent2Agent Protocol, OpenAI's Agentic Commerce Protocol, and others to ensure these platforms meet the same standards for ‘clear user intent, secure credentials and verifiable agent identity'.

Mastercard goes on to state that the protocols also protect merchants from fraud, provide transparency and strengthen authentication for issuers, and deliver confidence and convenience for consumers without adding friction. In addition, payments are made more personal with real-time, tailored experiences for every user.