The European Central Bank (ECB) has published its comprehensive payments strategy, setting out a consolidated, forward‑looking approach for the development of European payments across wholesale, business‑to‑business, retail and cross‑border use cases. The strategy has four strategic aims: (i) ensuring the effectiveness of monetary policy, financial stability and the smooth functioning of payment systems by maintaining the role of central bank money as the anchor of a two-tier monetary system; (ii) achieving strategic autonomy and increased resilience for European payments; (iii) fostering an integrated, competitive and innovative payments ecosystem; and (iv) supporting the international role of the euro.

These involve:

• Developing a European market for tokenised settlement assets by leveraging the innovative potential of tokenisation while maintaining central bank money as the anchor for settlement, complemented by private settlement assets. These private settlement assets include tokenised deposits and stablecoins that are EU-governed, euro-denominated and properly designed and regulated.
• Improving existing infrastructure and investing in distributed ledger technology (DLT)-based solutions for wholesale payments by continuing to support and invest in its RTGS settlement system T2 (including exploring the extension of its operating hours), while developing central bank money for the settlement of DLT-based wholesale payments and securities transactions through its Pontes and Appia initiatives.

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A Corrigendum to Regulation (EU) 2025/1355 of the European Central Bank on oversight requirements for systemically important payment systems, was published in the Official Journal of the European Union. The Corrigendum makes a purely technical correction to recital 2, replacing a typographical error. The correction does not introduce any substantive changes to the regulatory framework or to the oversight requirements applicable to systemically important payment systems.

The UK Financial Conduct Authority (FCA) has published its annual work programme for 2026/27 setting out its planned activity for the second year of its five-year strategy. The programme is structured around the following four strategic priorities:

• Being a smarter regulator: to improve regulatory efficiency and proportionality, the FCA will continue to invest in digital, data and AI capabilities, reduce administrative burdens by simplifying rules and streamlining data returns (including removing three regular returns in April), and improve the authorisation process by further reducing authorisation timelines and continuing to report against new, shorter voluntary targets. In a press release published on the same day, the FCA announced it is developing a new internal AI-enabled authorisation tool, integrated into its existing systems. The FCA will also use generative AI to review documents received from firms, which, following successful testing, it will begin rolling out more widely across authorisations and supervision.
• Supporting growth: the FCA highlights initiatives to unlock capital investment and liquidity across UK markets, accelerate digital innovation to improve productivity and support firms to start up and grow. This includes: (i) making rules for alternative investment fund managers more proportionate and streamlined; (ii) reforming capital requirements for solo-regulated investment firms to improve liquidity; (iii) simplifying the securitisation framework; (iv) establishing a bonds consolidated tape and progressing one for equities; (v) developing the long-term regulatory framework for open banking and advancing open finance work; (vi) expanding overseas presence; and (vii) supporting UK participants to adopt a trade plus 1 day (T+1) settlement cycle next year.

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The UK Payment Systems Regulator (PSR) has published its annual plan and budget, setting out its key aims, activities and costs for 2026/27. The PSR's work programme for the year ahead will embed many of the changes it set out last year. It will also maintain momentum on major, long-term initiatives while responding to new challenges. Over the next year, the PSR will focus on:

• Delivering the National Payments Vision: The PSR will oversee the delivery of critical payments infrastructure, working closely with the Bank of England, HM Treasury and the UK Financial Conduct Authority (FCA) through the Payments Vision Delivery Committee.
• Continuing action to tackle authorised push payment fraud: This year, the PSR will publish the independent evaluation of the first year of its authorised push payment fraud reimbursement scheme and consider if it needs to take further action.
• Enhancing its approach to supervision and enforcement: The PSR will continue to strengthen its business model and align it with FCA practices. This will enhance the PSR's oversight of the firms it supervises.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the payments sector. These reports replace the FCA's previous portfolio letters and will now be published annually for each industry sector. The report is directed at firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. In the report, the FCA sets out four key priority areas for the next 12 months:

• Preparing for the future to support effective competition, innovation and growth: The FCA will continue policy work on open banking, stablecoins, and modernising payments regulation. It will support industry in establishing a Future Entity for open banking. It will also support HM Treasury (HMT) in introducing legislation to grant the FCA powers to set new rules for the long-term open banking regulatory framework. The FCA will work with HMT to future-proof payments regulation, including consideration of whether changes to or the development of regulation is needed to support agentic AI payments. It will also work with the sector to consider how stablecoins and other tokenised payment instruments can be brought into regulated payments.
• Ensuring firms implement the consumer duty effectively: Firms are expected to assess their products, services and processes against all the relevant rules and guidance, including the consumer duty, on an ongoing basis, and address any compliance gaps immediately. The FCA will take appropriate action against firms that fail to do this. Areas of focus for the FCA include international payment pricing transparency and the treatment of vulnerable consumers.

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The UK Financial Conduct Authority (FCA) has published a revised version of its Payment Services and Electronic Money Approach Document, updating its guidance on exemptions from strong customer authentication (SCA), including the contactless payments exemption. Among other things, Chapter 20 of the Approach Document now states that:

• Payment service providers (PSPs) are allowed not to apply SCA at the point of sale where the payer initiates a contactless electronic payment transaction that has been reasonably identified by the payer's PSP as low risk. This exemption is subject to compliance with Article 2 of the SCA regulatory technical standards (SCA-RTS).
• In addition to the factors outlined in Article 2(2) of the SCA-RTS, the PSP may consider additional risk-based factors to help it identify whether a transaction is low risk, such as the payer's normal spending or behavioural pattern or their location.
• The PSP may also reasonably identify a transaction as low risk based on the value of the individual contactless electronic payment transaction, the cumulative value of previous contactless electronic payment transactions and/or the number of consecutive contactless electronic payment transactions since SCA was last applied. Whilst not required to do so, PSPs may place limits on the use of contactless payments to reflect these factors.

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The UK Financial Conduct Authority (FCA), the UK Prudential Regulation Authority (PRA) and the Bank of England (BoE) have published final policy statements setting out a co‑ordinated framework for operational incident and third‑party reporting. This follows consultations published in 2024.

The regulators are collectively replacing sector‑specific incident reporting regimes with a single, unified operational incident reporting framework. Under this, firms will make one reporting submission through FCA Connect, regardless of the regulators involved. Payment service providers (PSPs) will also now report serious operational incidents only through the new consolidated regime. Changes to the reporting process for PSPs are reflected in amendments to the Payment Services and Electronic Money Approach Document. The rules will apply from 18 March 2027.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the retail banking sector. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations.

In the report, the FCA notes that retail banking is undergoing significant change as customers use branches less and rely more on digital channels. Business models are also diversifying, with increased fintech activity and the continued development of open banking and new payment types.

The FCA sets out four priority areas for the next 12 months:

• Access to cash and essential banking services: As firms pursue digital first transformations, the FCA emphasises that firms must ensure these do not create foreseeable harm, particularly for customers with lower digital capability. Alternative services must be in place before any branch closures. The FCA will continue to monitor firms' approaches under its branch closures or conversions guidance and the consumer duty and will intervene where necessary.
• Good outcomes from products and services: Firms are expected to continue improving the data they use to monitor customer outcomes so they can identify where further action is needed. The FCA will take targeted action where it identifies poor outcomes, including poor value or issues affecting vulnerable customers.

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The Bank of England (BoE) has published a speech delivered by Andrew Bailey, Governor of the BoE and Chair of the Financial Stability Board (FSB) at the FSB Payments Summit on reforming cross‑border payments. Mr Bailey welcomes progress under the G20 cross‑border payments roadmap but stresses that implementation now needs to accelerate to meet the G20's 2027 targets. Looking ahead, he identifies cross‑border payments as a continuing strategic priority and sets out four areas of focus: (i) the development of jurisdictional and regional action plans to drive implementation of international standards, alongside a planned FSB review taking place in early 2027 of implementation of recommendations on data frameworks and bank and non‑bank regulation; (ii) further innovation and infrastructure upgrades, including deeper adoption of ISO 20022, extended RTGS operating hours, increased use of application programming interfaces and consideration of how digital payment innovations could support roadmap objectives; (iii) reducing regulatory compliance costs without diluting AML/CFT and other standards, including through greater cross‑jurisdictional consistency and the use of technology; and (iv) stronger commitment and coordinated action from the private sector, as well as some form of collective action, to move the dial on cross-border payments from the perspective of end users.

The House of Commons Treasury Committee has published a letter (dated 27 February) from David Geale, the executive director for payments and digital finance at the UK Financial Conduct Authority (FCA) and the managing director of the UK Payment Systems Regulator (PSR), following the recent PSR evidence session on 4 February. In the letter, Mr Geale responds to the Committee's questions and outlines some of the regulators' priorities as work progresses on the planned consolidation of the PSR into the FCA. For further background, you may like to read our blog post titled "UK Payment Systems Regulator to be abolished - what's next?" which explores key considerations and potential impacts of the transition.

• Mr Geale states that the FCA and PSR support retaining the full scope and substance of the PSR's core remit within the future integrated structure, while noting there is room for improvement, particularly in streamlining processes, clarifying responsibilities between regulators and ensuring investigative powers remain effective. He states that the FCA and PSR have been working with HM Treasury (HMT) to consider how a new legislative framework can support effective integration of the two regimes that avoids unnecessary duplication, complexity or uncertainty.
• Targeted changes potentially include simplifying access arrangements and enhancing appeals and enforcement mechanisms for information-gathering notices. The regulators will continue to engage with HMT on how these issues may be addressed through the ongoing legislative process.

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The UK Home Office has published its updated fraud strategy for 2026–29, setting out the government's new approach to tackling fraud. It explains how the UK intends to disrupt the methods used by criminals, strengthen protections for the public and businesses, and improve how victims are supported. The strategy is split into three pillars:

• Disrupt: cutting off the tools, technologies and platforms used by criminals, including launching the Online Crime Centre (a new capability that will bring together law enforcement, intelligence agencies and industry expertise to identify and dismantle fraud networks) and strengthening international partnerships. Amongst the initiatives seeking to prevent the abuse of the UK's financial flows, the Home Office will launch a call for evidence focused on unauthorised fraud, the UK Financial Conduct Authority (FCA) will consider examples of practices for preventing APP fraud and money mule activity and will share its recommendations, and HM Treasury will repeal the existing Strong Customer Authentication technical standards, allowing the FCA to incorporate key standards into its rules and adopt a more agile, outcomes-focused approach. Regulating cryptoasset financial services activities is also seen as a crucial step. The government intends to develop metrics for measuring the prevalence of fraudulent activity in financial services, and their performance in removing and/or blocking such activity.

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The European Central Bank (ECB) has launched a call for expression of interest inviting licensed payment service providers (PSPs) to participate in a digital euro pilot, marking a further step in the ECB Governing Council's decision to move to the next stage of the digital euro project. The pilot, scheduled to run for 12 months, will take place in the second half of 2027. It will test the technical functionality, operational processes and user experience of a beta version of the digital euro, which will not have legal tender status, within a controlled environment. The pilot will involve staff from Eurosystem central banks and selected merchants that provide everyday services on the premises of the ECB and euro area national central banks (e.g. cafeterias and restaurants), as well as e-commerce merchants. Staff of participating central banks will have the opportunity to make digital euro payments from person to person (both online and offline) and from person to business (both at the physical point of sale and in e-commerce, including mobile commerce). The pilot is intended to refine the design of a potential digital euro, noting that any final decision on issuance will only be taken after the relevant EU legislation has been adopted. The deadline for interested PSPs to complete and submit an application is 17:00 CEST (16:00 GMT) on 14 May. 

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The UK Financial Conduct Authority (FCA) has published a new webpage with information for cryptoasset firms that are currently using the services of an FCA-authorised firm to approve their cryptoasset financial promotions. Cryptoasset firms that are not authorised under the Financial Services and Markets Act 2000 (FSMA) or registered with the FCA under The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) (including overseas firms) may use FCA-authorised firms to approve their cryptoasset financial promotions (referred to as an s.21 approver) for communication to UK consumers. The webpage sets out information on the use of s.21 approvers ahead of the UK's new crypto regime coming into force on 25 October 2027:

• Cryptoasset firms that apply for authorisation during the application period—Cryptoasset firms using an s.21 approver and applying for authorisation (or variation) during the application period, which runs from 30 September to 28 February 2027, may continue to use their existing s.21 approver until their application is determined (including during any period in the saving provision).
• Cryptoasset firms that do not apply for authorisation during the application period—Cryptoasset firms using an s.21 approver that do not apply during the application period may continue to use their existing s.21 approver until the new cryptoasset regime comes into force. From this date, if the firm's application has not been determined, it will enter the transitional provision and only be allowed to communicate promotions to pre-existing contracts. These promotions will not require an s.21 approver.

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The UK Payments Vision Delivery Committee (PVDC) has published the payments forward plan, outlining key initiatives expected across retail and wholesale payments and aspects of digital assets in the next three years. The plan sets out the actions required to deliver the government's National Payments Vision and support the continued growth of the sector. It focuses on initiatives led by HM Treasury, the Bank of England, the Financial Conduct Authority and the Payment Systems Regulator, while reflecting wider UK government and public sector activity where relevant, and certain private sector-led workstreams that flow from public authority steers.

Several initiatives are also said to have implications beyond payments. In particular, the FCA will continue to explore potential interoperability between open banking and other smart data schemes, reflecting the government's intention for the open banking framework to form the basis for open finance. The PVDC states that while the plan captures a wide range of initiatives which are relevant to payments and seeks to provide clarity on key milestones, it is not exhaustive and timings remain subject to change. The Committee also confirms that an enhanced focus on payments will be added to the Regulatory Initiatives Grid in 2027.

The UK Payment Systems Regulator (PSR) has published an invitation to comment on a revised draft questionnaire for a proposed survey of UK merchants as part of its review of cross border interchange fee remedies. The survey will gather data on merchants' costs of processing online payments from the EEA using cards and certain alternative payment methods, with the results feeding into a Merchant Indifference Test to inform the appropriate level of cross border interchange fees. The PSR has updated the questionnaire following responses to the PSR's October 2025 consultation on the methodology for developing a price cap remedy. It decided to include questions on SEPA based bank transfer methods, PayPal and Klarna's "Pay in 30 days" product but proposes to exclude American Express. The deadline for comments is 5.00 pm on 5 March, noting that further revisions may be made ahead of fieldwork.

The Committee on Payments and Market Infrastructures (CPMI) has published an updated report on the harmonised ISO 20022 data requirements for enhancing cross‑border payments. This is a key milestone under the G20 roadmap to improve the speed, cost, accessibility and transparency of cross‑border payments. The report, updated from the previous version in 2023, reflects updated regulatory and standardisation developments, provides additional clarifications and introduces an updated and expanded data model set out in a separate technical annex to allow for more frequent updates in line with the ISO 20022 release schedule. The CPMI confirms that the requirements will be maintained at least until the end of 2027 and has established a joint panel with ISO 20022 global market practice groups to support ongoing maintenance and global adoption.

The UK Financial Conduct Authority (FCA) has published a new webpage introducing its regulatory priorities reports, introducing nine annual, sector‑specific reports to replace its previous portfolio letters. The FCA explains that this new approach is intended to provide a clearer and more consistent articulation of regulatory expectations, setting out the key priority areas for each sector, alongside related work the FCA plans to undertake over the coming year. Firms are expected to assess which priorities apply to them in light of their business models, including whether aspects of their activities fall within the scope of other sector reports. The FCA notes that the reports have been shaped by feedback from firms and trade bodies, and that it will continue to respond to emerging market events and risks, which may result in new or reprioritised supervisory work beyond what is set out in the reports. The FCA confirms that reports on consumer investments, retail banking, mortgages, consumer finance, wholesale buy side, wholesale markets and payments are all expected in March.

The Bank of England (BoE) has published a policy statement confirming its decision to extend CHAPS settlement hours by introducing an early morning extension (EME). This will move the start of settlement from 06:00 to 01:30 under an optional participation model, with implementation targeted for September 2027 (subject to final confirmation of the planned timelines with impacted CHAPS direct participants (DPs)). The EME follows the July 2025 consultation and is intended to support earlier settlement, improve liquidity management, enhance operational resilience and better align UK payment infrastructure with international markets. While CHAPS DPs may optionally send payments during the extended window (with no restrictions on payment types that can be sent), all participants will be able to receive payments from 01:30. The most critical payments, including CLS pay-ins and payments for central counterparties initial and variation margin calls, are not expected to move into the EME.

The BoE also confirms that it will not, at this stage, proceed with extending the evening CHAPS contingency window due to limited demand. It will, however, continue to explore options including additional settlement on certain bank holiday Mondays, a longer weekday operating window, and wider reforms as part of its longer-term roadmap towards near 24x7 settlement. It plans to publish a consultation paper examining the potential near 24x7 extension of RTGS/CHAPS settlement hours, discussing opportunities, challenges, use cases and the steps required to deliver it in the spring.

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 19 February) on digital assets and challenges for the competitiveness and integrity of the EU's financial system. The report explores the impact of the emergence of digital assets on the financial services sector and what that means for the regulatory framework. It discusses several ongoing risks in the digital assets sector, including, from a macro prudential standpoint, the need to strengthen data capabilities to better assess financial risks and the interconnectedness of digital assets with the broader financial system. The report also notes the role cryptoassets play in circumventing anti money laundering/countering the financing of terrorism requirements and sanctions.

It includes a motion for a European Parliament resolution which, amongst other things, calls on the various European authorities to strengthen the supervisory dialogue on significant multi-function groups (MFGs) and underlines the need to align the MiCAR policy framework for significant non-bank MFGs. It calls on the European Commission to come forward with a legislative proposal urgently to provide legal certainty on stablecoin multi issuance, and to provide strong prudential safeguards, robust cooperation arrangements, and enhanced crisis management protocols. It also stresses that interoperability is crucial in digital finance, and that legal entity identifier/verifiable legal entity identifier-type approaches should be assessed as infrastructure-grade tools. The EU's dependence on non-EU service providers for DLT infrastructure is also flagged as a matter of 'regret'.

The UK Financial Conduct Authority (FCA) has published a new webpage with guidance aimed at improving the quality of applications for authorisation and registration by payments firms and digital asset firms. The FCA outlines its regulatory expectations through a series of video guides covering common deficiencies and best practices. For both payments firms and digital asset firms, the videos cover the role of a Money Laundering Reporting Officer (MLRO), highlighting common anti‑money laundering compliance gaps and fitness and propriety standards, and the application process for authorisation. Other video guides are directed specifically at payment firms, focusing on how firms (including e-money firms) can prevent financial crime through business‑wide risk assessments, senior management responsibilities and controls against authorised push payment fraud, as well as on demonstrating an effective governance structure as part of an application for authorisation.

The Bank of England (BoE) has published its policy statement confirming the fees regime for financial market infrastructure (FMI) supervision for the 2025/26 fee year, following its October 2025 consultation. The BoE confirms that it will adopt the proposals set out in the consultation paper, including:

• Maintaining existing fee ratios across FMI categories and introducing a new Category 3 for UK payment systems, to align with other FMI types where this categorisation already exists. The BoE will provide further detail on the timing for applying the new fee ratios and implementing Category 3 in the 2026/27 FMI fees consultation paper, which is expected in April (rather than October as in previous years), following stakeholder feedback requesting earlier consultations on future annual fees. This approach will be maintained going forward.
• Increasing certain fees, notably for central counterparties (CCPs) and central securities depositories, to reflect expanded policy and rule‑making responsibilities under the Financial Services and Markets Act 2023, and to recover one‑off costs associated with developing the UK CCP rulebook over a three‑year period.

The BoE also confirms updated hourly rates for special supervisory projects, the treatment of under‑ or overspends from the 2024/25 fee year, and that enforcement fine revenues cannot be used to offset supervisory costs. It also confirms that HM Treasury are exploring options to increase the statutory fee cap for payment systems in future and will consult on any proposals in due course.

The European Central Bank (ECB) has announced a collaboration with the ONCE Foundation for Cooperation and Social Inclusion of People with Disabilities to ensure that the proposed digital euro is accessible to all users, including people with disabilities, older adults and those with limited digital skills. Under the agreement, the ECB will benefit from the foundation's expertise in providing technical advice on accessibility requirements and features for the digital euro application, collaboration on its design and testing accessibility functionalities in early prototypes once available. The collaboration aims to exceed the minimum legal requirements under the European Accessibility Act. The ECB intends to embed accessibility considerations from the earliest stages of design and development, ensuring that the application is clear, understandable and easy to navigate. The outcome of this work could also inform user experience requirements for payment service providers.

The European Banking Authority (EBA) has issued an opinion advising national competent authorities (NCAs) on how to proceed when the transition period (under its no-action letter of 2 June 2025) ends on 2 March. This transition period currently allows cryptoasset service providers (CASPs) to continue providing services involving electronic money tokens (EMTs) that qualify as payment services while submitting, and awaiting the response to, their application for authorisation under PSD2.

The opinion:

• Outlines the conditions under which NCAs are advised to allow CASPs to continue providing EMTs that qualify as a payment service after 2 March, while they do not (yet) hold a license under PSD2.
• Advises NCAs to require CASPs that do not meet all of these conditions to discontinue the provision of such EMT services.
• Advises NCAs to cooperate with the relevant NCA under MiCAR and/or other national enforcement authorities to ensure compliance.

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The UK Financial Conduct Authority (FCA) has published final policy statement PS26/1 setting out its final rules for regulating Deferred Payment Credit (DPC), commonly known as Buy Now Pay Later (BNPL). This follows the July 2025 consultation and the related statutory instrument (Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025) which brings interest-free BNPL agreements offered by a third part lender within the regulatory perimeter. This means that from 15 July ("regulation day"), relevant DPC agreements can only be entered into by firms already holding the relevant FSMA permissions or who have successfully applied under the temporary permissions regime (TPR), which allows firms to continue operating while the FCA assesses their applications. All merchants undertaking credit broking activities in relation to DPC agreements, including domestic premises suppliers, remain exempt from the need to be authorised under the amending legislation (Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025).

The FCA confirms it is largely implementing the rules and guidance as consulted on, with only minor amendments to ensure the rules and guidance work as intended. Key areas of change include: (i) key product information; (ii) credit reference agency disclosure; (iii) missed payment communications; (iv) debt advice signposting; and (v) the UK Financial Ombudsman Service voluntary jurisdiction. The FCA also concluded some new rules and guidance were needed to clarify its expectations on the application of the consumer duty to deliver its policy objectives. For more information on the changes, please see our blog post "Buy now, pay later – the final furlong... PS26/1 on the regulation of deferred payment credit published".

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The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 have been made and published with an accompanying explanatory memorandum. The statutory instrument (SI) introduces a comprehensive UK regulatory framework for cryptoassets under the Financial Services and Markets Act 2000 (FSMA). This follows the draft version laid before Parliament in December 2025, which we covered previously here. The transitional and savings provisions in the SI enable the FCA to specify a relevant application period and provide for the treatment of, and obligations on, those that do or do not secure all relevant authorisations within that period. This applies to firms seeking authorisation for the first time, FSMA- authorised firms needing to vary permissions, payments and e-money firms, firms that may be accessing the market through section 21 approvers, and firms which are FCA-registered for the purposes of the money laundering regime. The FCA confirmed through its updated webpage that this will be open from 30 September 2026 until 28 February 2027. The provisions enabling the FCA to make or approve rules, guidance, directions etc., in relation to the new regime come into force on 26 February. The go-live date for the new regime is 25 October 2027.

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The Financial Stability Board (FSB) has published its 2026 work programme. The FSB states it will continue its mission to promote global financial stability by addressing systemic financial risks and fostering international cooperation. Key priorities for the year include:

• Vulnerabilities assessments – the FSB will complete a report on private credit and will begin new work on vulnerabilities, possibly including work on foreign exchange derivative markets or private finance.
• Non-bank financial intermediation (NBFI) – the FSB will work to improve its methodologies to assess vulnerabilities in the non-bank sector as well as work on non-bank leverage and over-the-counter derivatives.
• Cross-border payments – the FSB will continue to coordinate the implementation of the G20 cross-border payments roadmap by helping jurisdictions with the development of their voluntary, specific and time-bound action plans.
• Digital innovation and AI – the FSB will continue to monitor developments regarding cryptoassets and will examine issues related to possible stablecoin vulnerabilities. It will also undertake work on sound practices for AI adoption, use and innovation by financial institutions, in close coordination with the standard-setting bodies.

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The Bank of England (BoE) has announced the launch of three new engagement forums under the Retail Payments Infrastructure Board as part of its National Payments Vision, aimed at informing the development of the UK's next generation retail payments ecosystem. The BoE will shortly invite nominations to join the Payments End User Forum, the Payments Innovation Design Group and the Payments Academic Advisory Group, each of which will provide specialist input from consumers and small businesses, innovators and fintechs, as well as academics respectively. Applicants will be assessed on: (i) relevant expertise in the forum's area (end-user insight, payments innovation or academic research); (ii) ability to make time to participate as set out in the terms of reference; (iii) diversity of perspective; and (iv) alignment with the purpose of the specific forum. The initiative is intended to support a more resilient, inclusive and innovative payments landscape by ensuring that system design is shaped by practical user needs, emerging technological opportunities and evidence‑based policy insights.

The European Banking Authority (EBA) has published its draft single programming document (SPD) for 2027–2029, outlining its strategic priorities and resource needs over the three‑year period. The EBA confirms it will focus on implementing new mandates for banking and payments including its oversight role under the Digital Operational Resilience Act, supervision of significant issuers of asset referenced and e money tokens under the Markets in Crypto-Assets Regulation and validation of initial margin models under the amended European Market Infrastructure Regulation (EMIR 3). The EBA will also focus on addressing emerging risks arising from geopolitical instability. This will require new approaches to risk assessment, financial stability monitoring and consumer protection. Supporting EU co legislators also remains central for the EBA as the SPD reflects the priorities for the financial sector and aims to keep the financial system strong while also ensuring it can fund the European economy.

Against this backdrop, the EBA identifies three strategic priorities for 2027–2029: (i) evolving and simplifying the Single Rulebook for banking and financial services; (ii) carrying out risk assessments to support effective risk analysis, supervision and oversight; and (iii) embracing innovation to enhance technological capacity across the sector. The EBA notes that close cooperation with relevant EU and third-country authorities will be required to meet its objectives.

The House of Lords (Financial Services Regulation Committee) has announced the launch of an inquiry into the growth and proposed regulation of stablecoins in the UK. The Committee will examine the development of global and UK stablecoin markets (and its comparison to US and EU markets), expected future growth of sterling‑denominated stablecoins and the opportunities and risks posed to the UK economy, financial services sector, retail consumers and monetary policy. It will also consider the implications of the Bank of England and UK Financial Conduct Authority's proposed regulatory regimes for systemic and non‑systemic stablecoins and whether they are measured and proportionate. A call for evidence, including six questions for written submissions, accompanies the press release. The deadline for responses is 23:59 on 11 March.

The UK Financial Conduct Authority (FCA) has published two separate updated webpages:

• The first updated webpage confirms an extension to the application deadline for those wishing to participate in the stablecoin sprint on 4-5 March and the trade payments roundtable on 15 May. Applications must now be submitted by midnight on 8 February. The FCA will continue to notify applicants of the outcome by 13 February.
• The second updated webpage confirms that the application period for firms wishing to undertake the new cryptoasset regulated activities will be open from 30 September until 28 February 2027.

The European Commission has issued a call for evidence on its forthcoming action plan to combat online fraud committed through the use of technology (whether online or by telephone). The initiative seeks to build on existing frameworks which already establish comprehensive anti-fraud measures, including the Payment Services Directive, the Instant Payments Regulation and the Digital Services Act. The plan aims to reduce the occurrence and impact of online fraud across the EU by reinforcing coordination, enhancing victim support and improving cross-border and multi-stakeholder cooperation. Its primary objective is to establish a more integrated approach to tackling online fraud. This includes strengthening the EU's 'follow-the-money' approach for detecting, tracing and disrupting fraud proceeds that are channelled through payment accounts, e-money and increasingly, crypto-asset transfers, leveraging EU requirements on supplying accompanying information with transfers of funds and certain crypto-assets. The deadline for feedback is 13 February.

The UK Financial Conduct Authority (FCA) has published a second consultation paper (CP26/4) on the application of the FCA handbook for regulated cryptoasset activities. This follows the earlier consultation published in September 2025 (CP25/5) and HM Treasury's draft statutory instrument intended to bring qualifying cryptoasset activities within the scope of the Regulated Activities Order 2001 and under the FCA's remit. The FCA intends to open its authorisation gateway for crypto permissions in September 2026, with the deadline for comments on this consultation being 12 March.

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The UK Financial Conduct Authority (FCA) and the UK Payment Systems Regulator (PSR) have issued a joint prioritisation statement clarifying their enforcement position on the UK Payments Initiative's (UKPI) centralised "access fee" pricing model being developed for commercial variable recurring payments (cVRP). After consulting the Competition Markets Authority (CMA), the regulators confirm that they will not, at this stage, prioritise investigations under Chapter I of the Competition Act 1998 in relation to specific pricing arrangements concerning UKPI's cVRP scheme.

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The UK Financial Conduct Authority (FCA) has published a letter (dated 19 December 2025) to trade associations outlining next steps towards establishing the Future Entity (FE) that will serve as the UK's long‑term open banking standards‑setting body. The FCA reflects on progress made in 2025, noting industry collaboration on the multilateral agreement for variable recurring payments (VRP), the creation of the transitional multilateral agreement operator and associated governance arrangements, continued development of the VRP commercial model and broader industry preparation for the increased adoption of open banking and VRP services.

Looking ahead, the FCA expects 2026 to be a landmark year, with live transactions flowing through the VRP scheme expected in Q1. It also anticipates that HM Treasury will introduce legislation under the Data (Use and Access) Act 2025 (DUAA) granting the FCA new rulemaking powers for open banking. The FCA plans to consult on new rules for the long‑term regulatory framework enabled by these powers. In parallel, the FCA expects industry to establish a body capable of becoming the FE, which it wants to be the UK's primary standards setting body for application programming interfaces (APIs). Subject to legislation, the FCA expects to use its powers under the DUAA to support this objective.

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The UK Financial Conduct Authority (FCA) has announced the launch of a two-day stablecoin tech-sprint. The sprint, taking place on 4-5 March, will explore the use cases for stablecoins in domestic and international payments, covering retail and wholesale applications. A separate, smaller roundtable will take place on 15 May, focusing on use cases for stablecoins in trade payments, identifying risks, opportunities and where regulation would be beneficial. Follow-up roundtables are expected throughout 2026. Outputs from the sprint are expected to provide actionable insights to directly inform future FCA policy decisions on potential stablecoin payment regulation in the UK. The FCA invites participation from fintechs, payment institutions (including EMIs and acquirers), banks, technology providers, corporates, issuers, consultants and representative groups. A participation pack has been made available with more information on the format of the event and the problem statements the FCA expects to tackle. Applications are due by midnight on 4 February. The FCA will notify applicants by 13 February if they have secured a place at the sprint and/or roundtable.

HM Treasury has published a statement from the G7 Cyber Expert Group (CEG) setting out a high‑level, non‑binding roadmap for a coordinated financial‑sector transition to post‑quantum cryptography (PQC). Building on its previous 2024 statement, the CEG highlights while quantum computing promises significant new capabilities for financial services, these advanced computers will be capable of breaking widely-used cryptographic protocols that protect systems and data. Therefore, the CEG explains how the financial sector should start preparing for this in advance of risks. The roadmap outlines a phased approach for both financial sector entities and public authorities for planning and coordination. It highlights key migration activities including awareness and preparation, discovery and inventory, risk assessment and planning, migration execution, testing and ongoing validation and monitoring. Although not legally binding, the CEG encourages firms to begin planning now. It notes that many jurisdictions currently reference 2035 as an overall target for full migration, with the most important systems ideally upgraded earlier (around 2030–2032). While the trajectory of quantum computing development is uncertain, the statement conveys it may be helpful for organisations to establish comparable migration timelines to ensure their milestones can be achieved prior to the availability of cryptographically relevant quantum computers. The CEG further encourages ongoing monitoring, cross sector information sharing and close coordination with international standard setting bodies to support a harmonised transition to PQC.

The UK Payment Systems Regulator (PSR) has published consultation paper CP25/3, proposing specific draft directions to implement two remedies arising from its market review of card scheme and processing fees. The review identified rising fees, weak competitive constraints and insufficient transparency for acquirers and merchants. Following feedback on its April consultation, which proposed four potential remedies, the PSR is now taking forward the following two:

• Information, transparency and complexity remedy, ensuring that acquirers and merchants through their contractual relationship, receive better information to understand the fees they are charged.
• Pricing governance remedy, ensuring that there is evidence behind pricing decisions.

The draft directions have been published separately on this webpage. A draft direction for a third remedy on regulatory financial reporting, intended to give the PSR enhanced data on profitability and card-scheme financial performance, will be consulted on separately by 31 March. The PSR confirms that other previously proposed remedies will not proceed. The deadline for responses is 5:00pm on 13 February.

The European Banking Authority (EBA), the European Central Bank (ECB), national central banks (NCBs), and national supervisory authorities (NSAs) across the EEA have signed a Memorandum of Understanding (MoU). The MoU aims to enhance cooperation and information sharing to support non-bank payment service providers' (NB-PSPs) access to central bank operated payment systems. The MoU sets out clear principles for collaboration to achieve three clear objectives: (i) to establish cooperation between NSAs and NCBs in the EEA for the exchange of information to support NCBs in their assessment of the compliance of NB-PSPs with requirements for granting access to central bank-operated payment systems in the EU; (ii) to establish procedures in a cross-border scenario for the NCB operating the payment system in the host member state to notify the NSA of the home member state about the NB-PSP' application and the NCB's decision regarding its participation; and (iii) to harmonise the processes and procedures across the EEA for the exchange of information between NSAs and NCBs, to the extent possible, by specifying the types of information to be shared, the timing and means of such exchange.

The European Banking Authority (EBA) has published a letter sent to the European Commission (EC) with the outcome of its EU AI Act mapping exercise. In January 2025, the EBA established a dedicated workstream to map the requirements on high-risk AI systems under the EU AI Act against relevant provisions in EU banking and payments regulation, with a focus on the use of AI for creditworthiness and credit scoring. The EBA confirms that, although the EU AI Act identifies overlaps between some requirements on high-risk AI systems and EU financial sector law and envisages targeted derogations and other ways to address this (such as integration or combination of requirements), it does not envisage such derogations for other requirements on high-risk AI systems (e.g. human oversight, data governance, cybersecurity) which are already widely regulated under EU financial services law.

The EBA highlights that the Digital Operational Resilience Act framework extensively covers the cybersecurity and business continuity requirements set out in the EU AI Act and that the Capital Requirements Regulation and Capital Requirements Directive IV requirements already provide a comprehensive and technology-neutral governance and risk management framework that can be applied to supervising the use of AI tools. The EBA sets out in an annex to its letter, a table identifying how EU financial services law already addresses relevant EU AI Act requirements. The EBA believes the table will be useful to the EC when producing the guidelines under Article 96(1)(e) of the EU AI Act on the interplay between the EU AI Act and EU financial services law and managing any regulatory overlaps.

The UK Financial Conduct Authority (FCA) and the UK Payments Systems Regulator (PSR) have published a joint update on the delivery of commercial variable recurring payments (cVRPs) as part of their open banking work. VRPs are an open banking technology that allow users to securely authorise trusted third parties to manage recurring transactions. The summary report highlights significant progress in 2025, with VRPs now accounting for 16% of open banking transactions, with much of the growth occurring through 'sweeping VRPs'. The FCA has been working with industry to advance VRPs for broader commercial use, in line with the National Payments Vision to build a competitive UK open banking market and accelerate rollout to 'phase 1' use cases. This year, 31 firms came together to establish a new UK Payments Initiative (UKPI) to drive VRP adoption for 'phase 1' use cases, including utilities, financial services, and government payments. Market momentum is growing, with additional players developing VRP schemes and transaction testing already in progress. In relation to UKPI, industry has agreed on a first-phase commercial model and the FCA expects the first live payments under the UKPI scheme will take place in the first quarter of 2026.

By the end of 2026, the FCA will assess industry-led cVRP growth and incorporate lessons from phase 1 into a long-term regulatory framework, developed in collaboration with HM Treasury (HMT). HMT is expected to introduce legislation in 2026 granting the FCA new powers to set open banking rules, and the FCA intends to consult on new rules for the long-term regulatory framework before the end of the year. The framework will be the foundation for expanding cVRPs into e-commerce and wider use cases.

The UK Financial Conduct Authority (FCA) and UK Payments Systems Regulator (PSR) have issued a joint letter to HM Treasury (HMT) (dated 11 November) providing an update on their progress against the 2024 recommendations HMT set for payments regulation and outlining focus areas through to 2026.

Key forward-looking priorities include:

• Co-ordination - the regulators set out how they have been working in an increasingly collaborative way to ease congestion in payments regulation.
• Open banking and open finance – the FCA has established a new department incorporating FCA and PSR capabilities, replacing the Joint Regulatory Oversight Committee (JROC) and streamlining decision-making for open banking and open finance. The FCA is working with industry to establish a future entity for open banking ahead of developing the statutory instrument with HMT and subsequently the long-term regulatory framework for open banking. In addition, the FCA has launched the smart data accelerator, with applications currently open for two prioritised open finance use cases in SME lending and mortgages. The FCA will publish a roadmap for this in early 2026, with regulatory foundations in place during 2027. The FCA is also collaborating with the Department for Business and Trade on cross-sector data sharing.

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The European Banking Authority (EBA) and the European Central bank (ECB) have published their joint 2025 report examining payment fraud trends across the EU/EEA from H1 2022 to H2 2024. The report confirms that strong customer authentication (SCA), mandated under the revised Payment Services Directive since 2020, remains effective in reducing fraud, particularly for card payments. However, overall fraud losses rose to EUR4.2 billion in 2024 (up from EUR3.5bn in 2023). Credit transfer fraud accounted for EUR2.2bn, while card payment fraud reached EUR1.3bn, with losses significantly higher for transactions outside the EEA where SCA is not required. The EBA and ECB stress the need for adaptive security measures and continued monitoring to address evolving fraud risks. For more information, you may like to read our blog post "Key takeaways from the EBA and ECB joint 2025 report on payment fraud".

The UK National Audit Office (NAO) has published its report on the Bank of England's (BoE) Real-Time Gross Settlement (RTGS) renewal programme. The RTGS is a core part of the UK's financial infrastructure, and the Bank of England launched the renewed system in April. The report, accompanied by a summary, examines whether the BoE managed the programme effectively to achieve a new system resilient to future developments and risks, and whether it identified wider learning from the programme. The NAO concludes that the BoE demonstrated good practice in digital transformation and risk management, with delays limited to 18 months and cost increases deemed reasonable given the programme's complexity. With the new RTGS now operational, the BoE plans to improve functionality over the next two to three years and will need to set long-term priorities to maintain and improve the system.

The NAO recommends the BoE:

• Applies lessons learned across other digital and business transformation projects.
• Sets clear plans for ongoing investment and resourcing to keep the RTGS and supporting services up to date.
• Understands and manages the impact of higher levels of change on RTGS users.
• Assesses the effectiveness of its interventions to widen access and reduce barriers, ensuring the best mix is in place.

The European Banking Authority (EBA) has published a single rulebook Q&A relating to the revised Payment Services Directive (PSD2). The Q&A addresses whether, under Article 68(1) of PSD2, a payment service provider (PSP) may impose general spending limits, daily or per transaction, for payment transactions initiated through specific channels (e.g., mobile banking) to mitigate fraud risk. The question also explores whether PSPs can apply different limits for domestic versus cross-border payments within the EU and whether PSPs are obliged to increase such limits upon a payment service user's (PSU) request for regular credit transfers. Additionally, the query considers the interaction between PSD2 and the Instant Payments Regulation (EU) 2024/886, particularly regarding PSU rights to set or modify limits for instant credit transfers in euro.

The Financial Services Regulatory Initiatives Forum has published the ninth edition of the Regulatory Initiatives Grid. This sets out the regulatory pipeline for the next two years, outlining 124 live initiatives which is a 13% reduction since the last grid was published. Key priorities include implementing Basel 3.1 standards, advancing the strong and simple prudential framework and reforms to the prospectus regime and wholesale markets review. Innovation-focused measures cover stablecoin regulation, the national payments vision, and development of a UK captive insurance regime, while consumer-focused reforms include the advice guidance boundary review and regulation of buy now pay later products. The Grid also highlights efforts to streamline regulatory processes, with 45 joint initiatives across sectors, and provides indicative timelines for consultations and implementation through 2027. Separate press releases announcing the Grid have also been published by the UK Financial Conduct Authority and the Bank of England.

The UK Financial Conduct Authority (FCA) has sent a letter to the Prime Minister providing an update on its growth strategy. It confirms delivery of most of the 50 pro-growth measures announced in January and outlines plans for 2026. The plans include finalising rules on stablecoins, setting out the delivery plan for open finance, reforming rules for venture capital and alternative investment fund managers and further speeding up IPO applications. The FCA also cites its plans to further overhaul mortgage rules so more people get on the housing ladder and is preparing for its expanded remit as anti-money laundering supervisor and integration of the UK Payments Systems Regulator. The letter highlights active support for firms digitising, with 31 already testing AI use cases, and commits to enabling tokenisation in asset management to drive efficiency and competition. The FCA also urges swift progress on digital ID to streamline know your customer requirements and calls for faster legislation to maintain reform momentum, including modernising the Consumer Credit Act. Finally, the FCA will use its convening power to galvanise system-wide responses to cross-cutting issues such as financial inclusion and mobilising defence investment to protect national and economic security.

The European Banking Authority (EBA) has published a follow-up peer review report on the authorisation of payment institutions (PIs) and electronic money institutions (EMIs) under the revised Payment Services Directive (PSD2). The review assessed actions taken by 29 national competent authorities (NCAs) following the 2023 report to address recommendations on authorisation processes, implementation of the EBA guidelines on authorisation, governance, AML/CFT controls, and local substance. While most NCAs improved efficiency through clearer guidance, pre-application engagement, and streamlined procedures, authorisation timelines remain highly divergent, ranging from 4-6 months to 27 months in one member state, with a median of 9.5 months (counting from the date of submission of an application). Delays are attributed to incomplete or low-quality applications and the time applicants take to address deficiencies.

While several supervisors have addressed previously identified deficiencies in the implementation of the EBA guidelines, notably on business plan assessments and AML/CFT controls, some gaps remain and in the assessment of local substance, creating risks of regulatory arbitrage. Therefore, despite notable improvements and a general move towards convergence, further efforts are needed. The EBA calls for further convergence to ensure a level playing field and robust supervisory practices across the EU.

The European Commission (EC) has published a Communication to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions on further development of capital market integration and supervision within the Union, announcing a set of major legislative reforms. The package seeks to address obstacles to innovation and barriers to integration resulting from divergent rules, duplicative requirements and inconsistent supervision. The EC proposes a suite of amendments to key EU financial services and capital markets legislation in a package described as a central component of the savings and investments union (SIU), specifically a:

• Regulation which will amend: (i) the European Securities and Markets Authority (ESMA) Regulation; (ii) the European Markets Infrastructure Regulation (EMIR); (iii) the Markets in Financial Instruments Regulation (MIFIR); (iv) the Central Securities Depositories Regulation (CSDR); (v) the Distributed Ledger technology Pilot Regulation (DLTPR); (vi) the Markets in cryptoasset Regulation (MiCAR); and (vi) the Cross-Border Distribution of Funds Regulation (CBDR). It also includes targeted amendments, in line with the changes proposed to the ESMA regulation aimed at making EU supervision more efficient, to: (a) the Central Counterparties Recovery and Resolution Regulation (CCPRRR); (b) the Securities Financing Transactions Regulation (SFTR); (c) the Credit Ratings Agency Regulation (CRAR); (d) the Benchmark Regulation (BMR); (e) the simple, transparent and standardised (STS) securitisation Regulation; (f) the European Green Bond Regulation (EuGB Regulation); (g) the Environmental, Social and Governance (ESG) rating Regulation.

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The UK Financial Conduct Authority (FCA) has published an update on its forthcoming review of the access to cash regime. The regime, introduced under the Financial Services and Markets Act 2023, seeks to maintain responsible provision of cash access services to consumers and businesses. The FCA expects to begin its review in Q4 2026 and publish findings in Q2 2027. While the exact scope and methodology will be determined closer to the time, the review will assess compliance, costs to firms and the regime's effectiveness in preventing gaps in cash access. It will include quantitative analysis and evaluation of indicators such as consumer sentiment and cash coverage data, alongside stakeholder engagement.

The Council of the EU and the European Parliament have announced a provisional political agreement on the EU payments package. While the final texts of the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) are not yet available, press releases indicate that negotiations centred on three key areas: fraud prevention, transparency and open banking. For further details, you may like to read our blog post "European Council and Parliament reach provisional agreement on EU Payments Package".