Beyond 2026, the focus shifts to longer-term structural reform. The digital pound, the move to open finance, and changes to prudential and settlement frameworks will reshape payments architecture, despite uncertain timelines.
Q1 2026 marks a critical phase for payments regulation, with developments across safeguarding, stablecoins, operational resilience, and payments data standards moving from policy design to implementation. This roadmap highlights the key reforms, timelines, and compliance risks that payments leaders must navigate to stay ahead in an increasingly complex regulatory landscape.
Spanning consumer protection, market conduct, operational resilience, and data standards, regulation touches every part of the payments value chain. The UK market is regulated by several authorities, with each initiative having consultation periods, policy statements, and often staggered implementation windows. Add sea change technological developments and staying on top of regulatory changes becomes challenging.
Payments Intelligence produces our quarterly regulation roadmaps to address this complexity, setting out consultation papers and policy initiatives chronologically, summarising the change brought by each, the legal issues they pose, and suggested next steps to take in response. The roadmaps draw directly on the papers published by the UK’s disparate regulatory bodies as well as our membership of senior compliance leads and legal professionals.
This edition covers reforms to safeguarding and prudential requirements for payment and e-money institutions, the continued embedding of Consumer Duty, and the strengthening of operational resilience and wind-down planning. The roadmap also tracks progress on payments infrastructure and data standards, including ISO 20022 migration and settlement reform, alongside policy developments affecting access to and use of payment accounts.
Digital assets and new forms of money are a further area of emphasis. The report maps the evolution of stablecoin regulation in the UK and internationally, facilitating comparison between emerging cryptoasset regimes. Taken together, these themes illustrate a regulatory agenda that is increasingly focused on resilience, transparency, and interoperability.
Payments regulation is moving from policy to implementation. This roadmap highlights what matters, when it matters, and why it matters.
Regulatory change rarely arrives in isolation. Overlapping initiatives, staggered timelines, and varying levels of certainty can make it difficult for firms to assess what genuinely requires attention. This roadmap is intended to reduce that complexity by providing a clearer line of sight across developments.
By setting developments out by timing and theme, the roadmap helps teams distinguish between what is imminent, what is emerging, and what can be monitored. This enables more informed internal discussions and better sequencing of regulatory work.
This roadmap is designed for teams involved in understanding, planning for, and responding to regulatory change across payments. Personas include:
While the roadmap is relevant across functions, it is particularly useful for teams responsible for translating regulatory change into business action. It can be used as a shared reference point across departments to align understanding and expectations.
The roadmap should be used as a planning and orientation tool alongside existing internal processes and external advice. It is intended to support discussion, prioritisation, and forward planning rather than replace detailed legal or regulatory analysis.
The timeline below sets out the sequencing of key regulatory developments affecting payments, highlighting anticipated milestones, areas of regulatory change and points of operational impact. It is intended to support planning by indicating where firms should prioritise assessment, mobilisation and delivery across near, medium and longer-term horizons.
Introduction « Previous
Q1 2026 brings FCA consultations on cryptoassets, prudential standards and market conduct, marking a step-change in regulatory expectations. AML updates, the removal of the £100 contactless limit and progress on open finance heighten near-term compliance and operational demands.
Proposed regulatory regime for sterling-denominated systemic stablecoins
In November 2025, the Bank of England published a consultation paper on a proposed regulatory regime for sterling-denominated systemic stablecoins. Systemic stablecoins are widely used in payments; the bank believes they may pose risks to the UK’s financial stability. Once recognised as systemic by HM Treasury, these stablecoins would be regulated by the Bank of England and the FCA.
The proposals aim to balance innovation with financial stability. Key elements include a revised backing-asset model, allowing issuers to hold at least 40% in unremunerated central bank deposits and up to 60% in short-term UK government debt, addressing concerns that earlier proposals were commercially unviable. A step-up regime would permit higher gilt holdings for issuers deemed systemic at launch.
The Bank also proposes risk-based capital and reserve requirements, with reserves held on a statutory trust to protect coinholders, alongside clear expectations on redemption at par, safeguarding, and operational resilience. Holding limits—£20,000 per individual and £10 million per business, with exemptions—are proposed as a transitional measure to mitigate risks of rapid bank-deposit outflows during adoption.
The consultation clarifies how systemic importance will be assessed (eschewing hard thresholds), affirms openness to public permissionless ledgers subject to risk controls, and outlines approaches to wholesale settlement via the Digital Securities Sandbox. Further consultations, including Codes of Practice and joint Bank–FCA implementation details, are planned from 2026.
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CP25/40: Regulating cryptoasset activities
CP25/40 sets out the FCA’s proposed rules and guidance for a new set of regulated cryptoasset activities. The consultation paper follows HMT’s draft statutory instrument ‘Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025,’ presented to Parliament in December of last year. Once approved, the Regulations will significantly expand the FCA’s remit beyond financial promotions and AML/CTF supervision, bringing a wide range of cryptoasset activities fully within UK financial regulation.
The consultation focuses on activities not covered in earlier papers (CP25/14 and CP25/15), including operating cryptoasset trading platforms, acting as intermediaries, cryptoasset lending and borrowing, staking, and the FCA’s proposed approach to decentralised finance (DeFi). Firms carrying out these activities in the UK will need to obtain FCA authorisation and comply with relevant FCA Handbook requirements, alongside obligations set out in parallel consultations on market abuse, admissions and disclosures (CP25/41), and prudential standards (CP25/42), which are covered below.
The FCA emphasises a “same risk, same regulatory outcome” approach, seeking to balance consumer protection, market integrity, and effective competition while supporting innovation and the UK’s international competitiveness. The proposals have been shaped by 92 responses to DP25/1 and feedback from statutory panels. The FCA acknowledges that regulation cannot eliminate all cryptoasset risks, but aims to ensure consumers can make informed decisions and that authorised firms operate to robust governance and conduct standards.
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CP25/41 sets out the FCA’s proposals for a new Admissions and Disclosures (A&D) regime and a Market Abuse Regime for Cryptoassets (MARC), following HM Treasury’s draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, published in December 2025. Together, these regimes form a core pillar of the UK’s future cryptoasset framework and will be implemented through the Designated Activities Regime (DAR) under FSMA.
The A&D regime will govern public offers of qualifying cryptoassets and their admission to trading on cryptoasset trading platforms (CATPs), introducing standardised disclosure requirements intended to improve the quality, consistency and reliability of information available to investors. Central to this is the introduction of Qualifying Cryptoasset Disclosure Documents (QCDDs), designed to support informed consumer decision-making and reduce the prevalence of scam or low-quality tokens. In parallel, MARC establishes a bespoke market abuse framework for cryptoassets, targeting insider dealing, unlawful disclosure of inside information and market manipulation, with obligations on CATPs and intermediaries to prevent, detect and disrupt abusive behaviour.
The FCA acknowledges that crypto markets differ structurally from traditional financial markets and that full alignment with the UK Market Abuse Regulation is not currently feasible. The proposals aim to raise baseline standards, strengthen market integrity and consumer protection, and support fair competition, while aligning with international standards set by IOSCO, the FSB, and FATF. CP25/41 should be read alongside CP25/40 and CP25/42 as part of the FCA’s wider crypto regulatory roadmap.
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CP25/42 sets out the FCA’s proposed prudential framework for cryptoasset firms that will require authorisation under the forthcoming Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, introduced by HM Treasury in December 2025. It differs from CP25/40 in its focus on how firms must fund themselves and withstand financial stress or failure, whereas CP25/40 focuses on the conduct and operation rules for newly regulated cryptoasset activities.
The consultation significantly expands the FCA’s oversight beyond financial promotions and AML/CTF requirements, establishing baseline financial resilience standards for firms carrying out regulated cryptoasset activities in the UK.
Building on CP25/15, this paper extends prudential requirements to the remaining regulated cryptoasset activities, including operating a qualifying cryptoasset trading platform (CATP), staking, arranging and dealing in qualifying cryptoassets (as agent or principal). It also introduces additional elements of the overall prudential regime that were deferred from earlier consultations. The FCA emphasises proportionality, recognising the diversity of cryptoasset business models and the differing risk profiles of activities such as stablecoin-related services versus unbacked cryptoassets.
The proposed regime is designed to reduce the risk and impact of firm failure, improve market confidence and resilience, and ensure firms hold sufficient own funds to support orderly wind-downs and, where relevant, redress consumer harm.
CP25/42 should be considered alongside CP25/40 and CP25/41 as part of the FCA’s broader crypto regulatory roadmap, with further conduct-related requirements expected in Q1 2026.
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This draft Statutory Instrument (SI) forms part of HM Treasury’s response to its consultation on Improving the Effectiveness of the Money Laundering Regulations and proposes targeted amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The objective is to close identified regulatory gaps, improve proportionality, and ensure the UK’s AML/CTF framework remains effective in light of evolving risks, including those arising from cryptoassets, trusts, pooled client accounts, and customer due diligence practices.
The SI seeks to make customer due diligence more risk-based and workable, including clarifying enhanced due diligence triggers, narrowing the definition of high-risk third countries to FATF “call for action” jurisdictions, and refining requirements for unusually complex or large transactions. It introduces reforms to pooled client accounts to improve access while maintaining transparency, and facilitates continuity of banking services following bank insolvencies through limited, safeguarded flexibility in ID verification timing.
The draft regulations also strengthen system-wide coordination by expanding information-sharing gateways between AML supervisors and public bodies, including Companies House, and by clarifying the FCA’s ability to share confidential information relating to cryptoasset firms.
Further measures address scope and registration issues, including converting euro-denominated thresholds to sterling, extending AML coverage to off-the-shelf company sales by TCSPs, reforming cryptoasset business registration and change-in-control tests to align with FSMA, and expanding the Trust Registration Service to improve transparency of trust ownership.
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The FCA has confirmed rule changes that will give banks and payment service providers greater flexibility to set contactless payment limits. From March 2026, firms with sufficiently strong fraud controls will be able to determine their own contactless limits, rather than being constrained by a single industry-wide cap.
The policy responds to the growing dominance of contactless payments in the UK. Research cited by Barclays indicates that almost 95% of eligible in-store card transactions were contactless in 2024, underlining consumer demand for faster, frictionless payment experiences. The FCA also encourages firms to allow users to set personalised contactless limits or switch contactless functionality off entirely.
The FCA stresses that existing consumer protections remain unchanged. Consumers will continue to be reimbursed for unauthorised contactless transactions, such as where a card is lost or stolen. The regulator sees the reforms as incentivising firms to invest further in fraud controls, aligning flexibility with enhanced consumer protection.
The change follows earlier discussion and consultation on contactless payments and forms part of a wider package of growth-focused measures outlined in the FCA’s January letter to the Prime Minister. Industry groups, including UKHospitality, have welcomed the move, citing benefits for high-street and hospitality businesses through quicker checkout experiences. Adoption of higher limits will be voluntary, but firms choosing to do so must clearly communicate changes to customers.
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The FCA announced a partnership and series of initiatives aimed at accelerating the development of open finance, ahead of publishing a formal open finance roadmap and strategy by March 2026. The announcement builds on commitments made in the FCA’s January letter to the Prime Minister, which highlighted digital innovation and the potential prioritisation of SME lending as key areas of focus.
Central to this work is the Smart Data Accelerator, launched in September 2025 as an extension of the FCA’s sandbox. The Accelerator is designed to test real-world open finance use cases in a controlled environment. To support this, the FCA has partnered with Raidiam, a specialist in data-sharing infrastructure that has supported open finance and open insurance initiatives internationally, including in Brazil. Through this partnership, participants will gain access to a stable testing environment that mirrors live conditions, enabling firms to simulate data sharing and develop secure, consumer-focused smart data solutions.
Alongside this, the FCA is running two TechSprints from 17 November 2025 to 12 February 2026, focusing on mortgages and SME finance, respectively. These sprints were open to firms, policymakers, industry bodies, and international partners (registration closed on 2 November 2025). The initiatives build on earlier FCA work, including the Open Finance Sprint held in March 2025, which explored practical consumer benefits of open finance.
The FCA positions this programme as supporting the government’s National Payments Vision and the UK’s ambition to be a global leader in open banking and open finance, while recognising the need to balance innovation with data protection and consumer safeguards.
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The 2026 medium-term agenda covers prudential, conduct and payments reform. Capital rule changes, BNPL regulation and the proposed systemic stablecoin regime point to tighter oversight, while ISO 20022 change, extended settlement hours and redress reform increase operational and compliance demands.
PS25/14 sets out the FCA’s final rules to simplify and consolidate the definition of regulatory capital (“own funds”) for FCA investment firms under MIFIDPRU 3, following consultation CP25/10. The policy removes all remaining cross-references to the UK Capital Requirements Regulation (UK CRR) and establishes a standalone, self-contained definition of capital within the FCA Handbook, tailored specifically to investment firms rather than banks.
Importantly, the changes are structural and clarificatory, not substantive. The FCA is not increasing capital requirements or requiring firms to change their capital structures. Instead, the reforms aim to reduce complexity, improve clarity and accessibility, and remove banking-specific provisions that are no longer relevant to investment firms. All capital definitions are now located in a single MIFIDPRU chapter, with clearer distinctions between CET1, AT1, and Tier 2 capital.
The policy forms part of the FCA’s broader programme to modernise and simplify the Investment Firms Prudential Regime (IFPR), delivering on commitments made in PS21/6. It also aligns with the Government’s wider regulatory reform agenda, including the Leeds Reforms and Mansion House commitments to streamline regulation while maintaining prudential resilience. The FCA positions these changes as the first phase in a longer-term vision for an integrated prudential sourcebook (COREPRU).
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The Bank of England has now confirmed the scope of ISO 20022 schema changes for the November 2026 CHAPS, RTGS, and deferred net settlement release, reflecting updated information published on 19 December 2025. These changes affect the machine-readable (XSD) schemas in MyStandards used within Swift validation libraries by the Bank and participants to validate CHAPS, RTGS, and net settlement messages.
The final 2026 change set is narrower and more targeted than earlier indicative lists shared in 2025. The majority of changes are corrections, updates, and incremental additions to existing ISO 20022 message schemas, primarily aimed at aligning UK high-value payment systems with international standards, including CBPR+ and HVPS+. Each change has been assigned a Swift impact categorisation, with the updated documentation now identifying the specific message types affected, enabling more precise impact assessments by firms.
Following industry feedback and internal capacity constraints, the Bank has reduced the scope of “other changes” planned for 2026. Notably, changes previously proposed for pacs.029, camt.053, and camt.054 to introduce optional reference fields for individual movements within deferred net settlement requests will not be delivered in 2026. These items have been formally moved to the change backlog for potential consideration in future release cycles. The updated documentation also provides transparency into changes that did not progress in 2026, supporting longer-term planning.
The Bank reiterates its expectation that November 2027 changes will focus on a broader ISO 20022 base message upgrade, rather than incremental schema adjustments.
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The regulations amend the Payment Accounts Regulations 2015 and the Payment Services Regulations 2017 to strengthen consumer protections and transparency around account refusals and contract termination, particularly in response to concerns about “debanking”. Made under powers in the Financial Services and Markets Act 2023 by HM Treasury, the Regulations come into force on 28 April 2026.
For payment accounts, designated credit institutions must now provide clear, specific reasons when refusing an application or terminating a framework contract, unless doing so would be unlawful. Consumers must also be informed of their complaints rights, including escalation to the Financial Ombudsman Service.
For payment services, the amendments introduce a new structure distinguishing contracts entered into before and on or after 28 April 2026. For new contracts, payment service providers must generally give at least 90 days’ notice before terminating an indefinite framework contract, alongside a sufficiently detailed explanation of the reasons and information on complaints routes.
However, the Regulations set out explicit exceptions where advance notice or the full notice period is not required, most notably where termination is linked to money laundering failures, serious crime, immigration requirements, public order offences, or where termination is directed by regulators including the FCA. These provisions aim to balance transparency and fairness with the need to preserve financial crime controls and public safety.
Key dates
The regulations come into force on 28 April 2026.
The FCA’s supplementary regime for safeguarding tightens governance, record-keeping, monitoring, and audit requirements, bringing safeguarding closer to the client asset standards applied to investment firms, while stopping short of a statutory trust model.
The policy statement follows the FCA’s consultation paper CP24/20, published in September 2024, which highlighted significant weaknesses: on average, only 35% of client funds were returned following insolvencies between Q1 2018 and Q2 2023.
Key changes include daily safeguarding reconciliations on “reconciliation days”, mandatory CASS-style resolution packs, annual safeguarding audits by Companies Act-qualified auditors (with exemptions for firms safeguarding under £100,000), and monthly regulatory returns covering balances, methods, reconciliations and breaches. Firms relying on insurance or guarantees must also plan to switch to segregation if cover cannot be renewed.
The FCA views the regime as successful if it reduces insolvency shortfalls and supervisory interventions. A future Post-Repeal (end-state) regime, likely modelled on CASS with statutory trusts, is envisaged but no timeline has been set.
Payments Intelligence covered the changes to the safeguarding regime in more detail here.
Key dates
The rules take effect on 7 May 2026.
The Financial Ombudsman and the FCA published CP25/22 in July 2025, seeking stakeholders’ views on proposals to modernise the redress framework, to better serve consumers and give firms greater certainty to invest and innovate.
The current redress regime is widely seen as creating uncertainty for firms and investors, particularly around complaint handling, mass redress events (MREs), and the consistency of Financial Ombudsman decisions. The proposals therefore focus on earlier identification of harm, clearer expectations on proactive redress by firms, and closer coordination between the FCA and the Financial Ombudsman.
Key measures include clarifying when firms should notify the FCA of systemic issues, introducing criteria to identify potential MREs, and strengthening collaboration between regulators through new referral and “lead complaint” mechanisms. Operational reforms at the Financial Ombudsman include a new registration stage for complaints and changes to delegated decision-making to improve consistency and speed.
Taken together, the reforms seek to deliver faster and more predictable redress for consumers, reduce poorly evidenced complaints, and support the FCA’s secondary objective of growth and international competitiveness.
Key dates
The consultation period closed on 8 October 2025. A policy statement is expected in H1 2026.
Following CP25/23 on deferred payment credit (DPC), better known as buy now pay later, regulation will come into force in 2026. Third-party lenders offering interest-free DPC agreements (repayable in 12 or fewer instalments within 12 months) to finance purchases from merchants will fall within the FCA’s regulatory perimeter. Merchants offering DPC directly to customers will remain exempt.
The consultation responds to rapid growth in the sector, which has grown from £0.06bn in 2017 to over £13bn in 2024, according to data cited by the FCA. Additionally, there are concerns that unregulated DPC lending may expose consumers to affordability risks, insufficient pre-contract information, and poor outcomes for borrowers in financial difficulty. Around 20% of UK adults used DPC in 2024, with usage higher among consumers already experiencing financial stress.
The FCA proposes a proportionate regime that largely leverages existing consumer credit rules and the Consumer Duty, rather than creating a bespoke framework. Proposals cover pre- and post-contract information requirements, proportionate creditworthiness assessments, complaints handling and access to the Financial Ombudsman Service, and new data-reporting obligations (including Product Sales Data).
A Temporary Permissions Regime (TPR) will allow currently unauthorised DPC lenders to continue operating while their applications are assessed.
Key dates
A policy statement and final rules are expected in early 2026, with regulation day on 15 July 2026.
The window for TPR registration runs from 15 May to 1 July 2026.
The FCA’s December 2025 policy statement ‘Tackling non-financial misconduct in financial services’ sets out guidance on non-financial misconduct (NFM) in financial services, following consultation under CP25/18. The reforms amend the Code of Conduct (COCON) and clarify how NFM is assessed under the Fit and Proper (FIT) framework, aiming to improve consistency, certainty, and fairness in how firms address misconduct.
The reforms build on the FCA and Prudential Regulation Authority’s joint Discussion Paper (DP21/2, 2021) and the FCA’s September 2023 consultation (CP23/20). The FCA reports that its proposals received broad industry support, with 80% of authorised firms and 90% of trade bodies backing its approach.
The guidance responds to strong industry support (95% of respondents) for additional clarity, while emphasising that firms must continue to exercise judgement. The FCA stresses that its framework does not replace employment law, criminal law or internal disciplinary processes, nor does it create new routes for employee redress. Instead, it is intended to help firms take decisive, proportionate action where behaviour risks harming individuals, workplace culture, consumer outcomes or market integrity.
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The Bank of England is consulting on Phase 1 of extending settlement hours for CHAPS on its renewed RTGS platform, RT2. Following RT2’s go-live in April 2025 and strong industry support for longer hours, the Bank proposes opening CHAPS for settlement from 1.30 am on existing business days, ahead of the current 6 am start. This is positioned as a stepping stone toward near-24×7 settlement around the turn of the decade.
The proposal aims to align UK settlement more closely with international peers (including euro-area T2 and US Fed systems), support cross-border initiatives under the G20 Roadmap, reduce settlement risk, and unlock innovation (e.g. synchronisation interfaces, tokenisation) by extending access to central bank money. Implementation is targeted for H2 2027, subject to consultation feedback.
Participation in the early window (1.30 am–6 am) would be optional for CHAPS Direct Participants (DPs). All DPs would receive incoming payments from 1.30 am, but only those opting in would send payments early. The Bank proposes a proportionate “alert and respond” support model, with no active business support until 5.45am and no changes to existing contingency, liquidity facilities, or euro bridge timings. Intraday liquidity would be credited at 1.30 am but would not be amendable before 8 am.
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The government has confirmed its intention to legislate for artificial intelligence (AI) but has not yet published a timeline. The FCA has welcomed the move and emphasised its commitment to a “technology-agnostic, principles-based and outcomes-focused” approach.
Rather than creating a dedicated statutory AI regulator, the government has asked existing bodies — including the FCA, CMA, ICO, Ofcom and MHRA — to apply a common set of five cross-sector principles within their own remits. These principles are: safety, security and robustness; appropriate transparency and explainability; fairness; accountability and governance; and contestability and redress.
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Beyond 2026, the focus shifts to longer-term structural reform. The digital pound, the move to open finance, and changes to prudential and settlement frameworks will reshape payments architecture, despite uncertain timelines.
In July 2025, Andrew Bailey, governor of the Bank of England, noted he would need “a lot of convincing” on the benefit of a digital pound if commercial banks continue to deliver effective digital payment solutions, questioning the added benefit of a central bank-issued alternative.
This marks a shift from the Bank and HM Treasury’s position just two years earlier, when they anticipated that a digital pound could be introduced before 2030. The Bank’s April 2025 report confirmed that offline payment functionality with a digital pound is technically feasible but highlighted trade-offs around user experience, double-spending, and counterfeiting controls.
Key dates
2026: A blueprint to be published, setting out the key design elements necessary to support the Bank and HM Treasury in assessing the policy case for a digital pound
Open finance will extend secure, consent-based data sharing beyond current accounts and payments into a much wider range of financial products, including mortgages, pensions, investments, savings, and insurance.
In September 2024, the Competition and Markets Authority (CMA) confirmed the completion of the open banking roadmap. The FCA plans to publish a roadmap for open finance by March 2026, following the conclusion of the second tech sprint on 12 February 2026 as part of the Smart Data Accelerator scheme.
Further information on the move to a Future Entity as the primary standard setting body is still pending.
Key dates
March 2026: FCA to publish roadmap for open finance
In January 2025, the PRA, in consultation with HM Treasury, announced a one-year delay to the UK’s implementation of Basel 3.1 standards, moving the start date to 1 January 2027. Basel 3.1 is intended to improve banks’ measurement of risk and standardise approaches to capital calculation, making capital ratios more consistent and comparable across firms.
Although the start date has been pushed back, the PRA has confirmed that full implementation is still targeted for 1 January 2030, with transitional periods shortened to compensate. The decision reflects uncertainty around the US timetable for Basel 3.1 and the UK’s desire to maintain competitiveness and avoid misalignment with other major jurisdictions.
Key dates
Initial implementation is expected on 1 January 2027 with the full implementation on 1 January 2030.
The UK will transition from a T+2 to a T+1 settlement cycle for securities transactions on 11 October 2027. This will require equities and bonds to settle within one business day of execution, improving efficiency and reducing counterparty risk. The Accelerated Settlement Taskforce (AST), chaired by Andrew Douglas, has been appointed to oversee and coordinate the transition, with the FCA and Bank of England providing support as observers.
International alignment is strong: the US, Canada, Mexico, and Argentina moved to T+1 in May 2024, while the EU reached a provisional agreement in June 2025 to adopt T+1 from the same date as the UK. Switzerland is also targeting October 2027. Coordinated adoption reduces the risk of settlement mismatches in cross-border trading.
Key dates
Implementation is targeted for 11 October 2027
The Prudential Regulation Authority has proposed delaying implementation of the Fundamental Review of the Trading Book – Internal Models Approach (FRTB-IMA) by one year, from 1 January 2027 to 1 January 2028. The proposal reflects concerns about cross-border consistency and operational complexity for internationally active firms that would otherwise need to run multiple market risk model frameworks in parallel across jurisdictions.
Under the proposal, firms with existing IMA permissions would retain their current CRR IMA models during the interim year from 1 January 2027, rather than transitioning immediately to the new FRTB-IMA framework. Positions not covered by existing IMA permissions would move to the new standardised approaches (ASA or SSA), meaning that firms with IMA approval would apply the ASA to any out-of-scope positions.
To enable this delay, the PRA proposes a package of consequential rule and policy changes, including incorporating the existing CRR IMA rules into the PRA Rulebook, issuing an interim supervisory statement (SS13/13), adjusting profit and loss attribution monitoring periods, and retaining current reporting and disclosure requirements for IMA firms. All FRTB-IMA-specific requirements set out in PS17/23 and PS9/24 would instead take effect on 1 January 2028.
Key dates
1 January 2028: FRTB-IMA implementation may be delayed until then
International developments matter for UK firms and as a point of comparison. In the EU, PSD3, the Payment Services Regulation, MiCA, the Digital Euro and mandatory instant payments raise standards for resilience, consumer protection and interoperability, while in the US the GENIUS Act signals a more formalised approach to stablecoin regulation.
The EU Instant Payments Regulation (IPR), formally adopted in March 2024, is designed to accelerate the uptake of instant credit transfers in euros across the European Union and address persistently low adoption rates. Despite the availability of the SEPA Instant Credit Transfer (SCT Inst) scheme since 2017, instant payments accounted for a relatively small share of euro credit transfers prior to regulation, reflecting cost, fraud, and infrastructure barriers.
The IPR amends the SEPA Regulation and related EU payments legislation to make instant payments the default for euro credit transfers. Payment service providers (PSPs) that offer standard euro credit transfers must now also offer instant credit transfers, with funds made available to the recipient within 10 seconds, 24/7. Charges for instant payments must not exceed those for equivalent standard credit transfers, removing pricing as a barrier to adoption.
The regulation also introduces strengthened safeguards. PSPs must provide Verification of Payee services for both instant and standard credit transfers, free of charge to customers, and must conduct simplified sanctions screening at least daily rather than on a per-transaction basis for instant payments. These measures aim to balance speed with fraud prevention and compliance.
Implementation is being phased. Core obligations began applying to eurozone credit institutions in 2025, with later deadlines for payment institutions, e-money institutions, and PSPs in non-euro EEA countries. Updated SCT Inst rulebooks and implementation guidelines have been issued to align market practice with the new regulatory requirements, signalling a decisive move towards pan-European, real-time payments as a baseline expectation.
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Receiving instant payments:
Sending instant payments:
Equality of charges:
Verification of payee:
The European Union’s payments reform package – comprising a third Payment Services Directive (PSD3) and a new Payment Services Regulation (PSR) – represents the most significant overhaul of EU payments law since PSD2 in 2016. Originally proposed by the European Commission in June 2023, the European Parliament and the Council of the European Union agreed a compromise text in 2025. The final legal texts are expected to be formally adopted following legal-linguistic review and translation, likely by late Q1 or early Q2 2026.
Once adopted, PSD3 and the PSR will replace both PSD2 and the Electronic Money Directive, creating a unified payments framework. PSD3, as a directive, will govern authorisation, licensing and supervision of payment and e-money institutions, while the PSR – directly applicable across all member states – will harmonise conduct of business, consumer protection, security and open banking obligations.
The agreed reforms introduce materially stronger fraud and liability provisions (including verification of payee for all credit transfers), enhanced consumer controls, clearer data-access rights, and expanded obligations for technology and platform providers. The framework also clarifies the interaction between payments regulation and crypto-asset services under MiCA, including streamlined authorisation for already-licensed crypto firms.
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On July 18, 2025, President Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, creating the first comprehensive federal licensing and supervisory regime for payment stablecoins. The Act restricts issuance to licensed entities, imposes prudential and reserve requirements, and clarifies their regulatory treatment under US law.
The regime takes effect on the earlier of (i) 18 January 2027 or (ii) 120 days after final implementing regulations are issued, and will be overseen by the US Treasury, OCC, Federal Reserve, FDIC, state agencies, and a new interagency Stablecoin Certification Review Committee.
The Act defines payment stablecoins as fully backed, redeemable at par, and subject to reserve segregation, audits, and monthly certifications. It also distinguishes them from securities and commodities, resolving jurisdictional overlap between the SEC and CFTC.
Foreign issuers may operate in the US only if their home regime is judged “substantially similar,” and they must maintain reserves within the US.
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The European Central Bank (ECB) and EU co-legislators are advancing plans for a retail digital euro, designed to provide a central bank-issued digital means of payment for consumers and businesses across the euro area. The initiative is intended to complement cash, reinforce monetary sovereignty, and support resilient, pan-European payments infrastructure alongside privateI’m private payment solutions.
In December 2025, the Council of the European Union agreed its negotiating position on two draft regulations: one establishing the legal framework for a potential digital euro, and another strengthening the legal tender status and acceptance of euro cash. Under the agreed approach, the digital euro would be usable online and offline, offer a high degree of privacy, and exist alongside private payment methods such as cards and wallets. To mitigate financial-stability risks, holding limits would apply, with caps set by the ECB within parameters agreed by legislators and reviewed periodically.
The framework brings greater clarity on costs and compensation for PSPs. Core digital euro services (such as account opening, basic payments, and funding/defunding) must be free for consumers, while value-added services may be charged. Interchange and merchant service fees will be capped for a minimum of 5 years, after which caps will be based on actual costs. The framework also mandates fair access to mobile device hardware and software for digital euro services.
Once the legislation is formally adopted by the European Parliament and the Council, the final decision on issuance will rest with the ECB, which has indicated the digital euro could be operational by 2029, subject to successful testing and implementation.
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The EU’s Markets in Crypto-Assets Regulation (MiCA) creates the first comprehensive pan-European framework for cryptoasset issuance, custody, trading, and marketing. It introduces licensing requirements for cryptoasset service providers (CASPs), disclosure obligations for issuers, prudential and conduct standards, and a regime for stablecoins (asset-referenced tokens and e-money tokens).
Grandfathering for existing firms ends on 1 July 2026, after which all CASPs must be MiCA-authorised to operate. Member states may apply shorter transition periods. MiCA also strengthens rules on market abuse, white papers, and marketing, and will be enforced by national competent authorities across the EU.
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Q1 2026 marks the point at which several long-signalled reforms become unavoidable. Firms should expect higher compliance costs, greater supervisory scrutiny, and reduced tolerance for weak governance, safeguarding, or financial resilience.
Cryptoasset and stablecoin proposals materially expand the regulatory perimeter. Firms operating across payments, crypto and digital assets must assess cumulative impact across authorisation, prudential capital, disclosures and market conduct, rather than treating each consultation in isolation.
Operational readiness is now decisive. Daily safeguarding reconciliations, enhanced wind-down planning, data standards migration and fraud controls will test systems, people and third-party dependencies well before formal deadlines.
Early engagement with consultations and implementation planning will be critical. Firms that move first will be better positioned to manage regulatory risk, protect customers and compete as the UK payments landscape continues to evolve.
UK merchants expect agentic commerce to grow rapidly, but uncertainty around liability, fraud, and standards is slowing readiness.
Stablecoins are moving into mainstream finance, reshaping payments, trade, and regulation as institutions explore faster, programmable settlement.
A forward-looking overview of key regulatory developments across payments, crypto and financial services, with timelines and practical implications.
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