FinTech Global FS Regulatory Round-up - W/e 22 August 2025

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Global

Trade bodies urge BCBS to revise crypto prudential standard

The Global Financial Markets Association (GFMA), in coalition with other trade bodies and technical advisers, haswrittento the Basel Committee on Banking Supervision (BCBS) to recommend recalibration of, and a pause to implementation of, the Basel standard on cryptoassets. The correspondents comment that revisions are necessary to ensure the standards 'better reflect actual risk profiles and [...] support responsible innovation within the regulatory perimeter'.

Areporton the transformative impact of DLT on capital markets accompanies the letter. [19 Aug 2025]#Crypto #DigitalAsset #DLT

BIS Innovation Hub: Project Noor – explaining AI models for financial supervision

The Bank for International Settlements (BIS) Innovation Hub hasannouncedthe launch of Project Noor, an initiative that seeks to equip financial supervisors with independent, practical tools to evaluate and interpret the inner workings of AI models used by banks and other financial institutions. By combining explainable AI methods with risk analytics, the project aims to deliver a prototype through which supervisors can verify model transparency, assess fairness, and test robustness.

Project Noor will prototype the latest Explainable AI (XAI) techniques in a controlled setting. XAI converts complex model logic into plain language and intuitive visuals, making it easier to see which factors influenced a decision and how sensitive that decision is to change, all while preserving privacy. [18 Aug 2025]#AI

UK

FCA reports findings of multi-firm review of algorithmic trading controls

The FCA haspublishedthe findings from its multi-firm review of principal trading firms' compliance with the Markets in Financial Instruments Directive (MiFID)Regulatory Technical Standards (RTS) 6and algorithmic control frameworks.

The findings include best practices and areas for improvement in: governance; development and testing; risk controls; and market abuse surveillance. The FCA found that most of the firms that were reviewed had a good understanding of their obligations under RTS 6. However, there was significant variation in the sophistication of firms and their level of compliance, even when taking account of the nature, scale and complexity of their trading activities.

The regulator asks principal trading firms engaged in algorithmic trading to consider which elements of its findings might help them improve their algorithmic control frameworks. [21 Aug 2025]#Algos

BoE: RTGS and CHAPS Annual Report 2024/25

The Bank of England (BoE) haspublishedtheReal-Time Gross Settlement (RTGS) system and CHAPS Annual Report 2024/25. Highlights from the foreword to the report include:

• the BoE's completion, in April 2025, of a multi-year programme to renew RTGS – RT2 – with transition to the new core ledger and settlement engine having taken place;
• the development of new strategic themes – resilient and responsive – which are underpinned by five strategic outcomes for the next stage of development in RT2; and
• the BoE's progress across three priority features of its Future Roadmap: extended settlement hours for RTGS/CHAPS; synchronisation of transfers in RTGS with settlements in other ledgers; and continuing to develop the resilience of RTGS. [21 Aug 2025] #Payments

FCA report: Generating and using synthetic data for models in financial services – governance considerations

The FCA haspublishedthe Synthetic Data Expert Group's (SDEG's)second reporton using synthetic data for models in financial services, which builds on the considerations outlined in thefirst paperand responds to key feedback to its 2022call for input.

The report is not guidance; it highlights insights and best practices identified by SDEG members. The considerations and actions to assess, manage, and mitigate outlined are non-exhaustive and will require further iteration as synthetic data usage expands. However, they show how synthetic data considerations can fit within, or complement, existing governance frameworks for conventional models and data usage.

The contents of the report do not represent the views of the FCA or any participating organisation. [19 Aug 2025]#SyntheticData

Europe

OJ: MiCAR – Delegated Regulation in relation to market abuse

Commission Delegated Regulation (EU) 2025/885supplementing the Markets in Cryptoassets Regulation (MiCAR) with regard to regulatory technical standards (RTS) specifying the arrangements, systems and procedures to prevent, detect and report market abuse, the templates to be used for reporting suspected market abuse, and the coordination procedures between the national competent authorities (NCAs) for the detection and sanctioning of market abuse in cross-border market abuse situations, has been added to the Official Journal of the EU (OJ).

This Regulation will enter into force on the twentieth day following that of its publication in the OJ. [20 Aug 2025]#Crypto #MiCAR #DigitalAsset

Australia

APRA publishes 2025-26 Corporate Plan

The Australian Prudential Regulation Authority (APRA) haspublishedits latestCorporate Plan, which outlines its strategic direction for the next four years. The plan focuses on ensuring the safety and stability of Australia's financial system, with particular emphasis placed on banks, insurers and superannuation trustees.

In relation to the top strategic priorities, a major focus of the plan is cyber resilience, with APRA aiming to bolster defences across the financial sector in response to increasing cyber threats, including those linked to AI and geopolitical instability. [21 Aug 2025]#Cyber #AI

Hong Kong

Insurance Authority launches AI Cohort Programme and indicates it will issue updated guidelines next year to provide regulatory clarity on use of AI

The Insurance Authority hasannouncedthe launch of its AI Cohort Programme. At the launch ceremony held at the Cyberport,seven insurerspledged as core participants of the AI cohort, to establish centres of excellence in Hong Kong to support group-wide innovation, experimentation and deployment, nurture talents in Hong Kong, as well as share insights with fellow industry stakeholders.

In hisopening remarksat the launch ceremony, Mr Stephen Yiu, Chairman of the Insurance Authority, strongly encouraged all insurers to take part in the AI cohort to benefit from the experiences of core participants as well as resources and advice. The Insurance Authority notes from its survey of over 110 insurers earlier this year that AI is already transforming the insurance landscape, from underwriting and claims to fraud detection and customer service. 20% of insurers have established a strategy to steer AI adoption and are implementing AI applications. Over half are at the exploratory or pilot stage, and 40% plan to increase AI investment in the next two years.

Mr Yiu also mentioned that the Insurance Authority will issue updated guidelines next year to provide regulatory clarity on the use of AI. Its goal is not to create unnecessary frictions or hurdles, but to enable and facilitate AI adoption in a responsible way. [18 Aug 2025]#AI

Banking rule amendments to implement prudential treatment of cryptoasset exposures and miscellaneous updates to take effect on 1 January 2026

The HKMA has published acircularinforming authorised institutions that the 28-day period for the negative vetting of the following rule amendments by the Legislative Council has expired without extension:

• Banking (Capital) (Amendment) Rules 2025;
• Banking (Disclosure) (Amendment) Rules 2025; and
• Banking (Exposure Limits) (Amendment) Rules 2025.

The amendments are to implement the capital standards and the associated requirements on disclosure and exposure limits promulgated by the Basel Committee on Banking Supervision in relation to the prudential treatment of cryptoasset exposures, and to make other miscellaneous updates (see ourprevious update). The amendments will come into operation on 1 January 2026. [15 Aug 2025]#Crypto #DigitalAsset

Thailand

SECT launches TouristDigiPay sandbox

The Securities and Exchange Commission Thailand (SECT), in collaboration with the Ministry of Finance, Anti-Money Laundering Office (AMLO), and Ministry of Tourism and Sports, haslauncheda sandbox project to enable the conversion of digital assets into Thai Baht for spending via e-money. The project, which is known as 'TouristDigiPay', provides an option for foreign tourists to use digital assets as a source of funds for their spending in Thailand. It will run for 18 months, and will launch in Q4 2025. [18 Aug 2025]#DigitalAsset #e-Money

Vietnam

SBV attends seminar on application of AI in policy communication and banking products and services

The State Bank of Vietnam (SBV) haspublisheda summary of a seminar held by theBanking Timeson the application of AI in policy communication and banking products and services.

The seminar included several presentations from officials and educators, covering the development of ethical principles for AI development and application, IT system security, and developing human resources. [20 Aug 2025]#AI

US

Fed: Governor Waller's remarks on technology in payments innovation

The Federal Reserve (Fed) haspublishedthe remarks delivered by Governor Christopher J. Waller at the Wyoming Blockchain Symposium 2025. Mr. Waller discussed current payments innovations, including the cryptocurrencies, stablecoins, smart contracts, DLT, and AI. He highlighted the importance of the Fed engaging with innovators in the industry as the traditional financial sector and digital assets ecosystem converge, and said that work was underway to improve that engagement. [20 Aug 2025]#Payments #Crypto #DigitalAsset#AI

Fed: Vice Chair for Supervision Bowman's remarks on embracing innovation

The Fed haspublishedthe speech delivered by Vice Chair for Supervision Michelle W. Bowman at the Wyoming Blockchain Symposium 2025. Ms. Bowman outlined the Fed's approach to technology and tools such as blockchain in the context of banking supervision. She also commented on the impact of supervisory focus on "reputational risk." Finally, Ms. Bowman set out principles for a tailored regulatory framework that accommodates technology:

• regulatory certainty, which is key to facilitating investment in new technologies and collaboration between traditional finance and innovators;
• rules that are well-calibrated and tailored to address risks –a one-size-fits-all approach is no longer appropriate as new assets emerge;
• the regulatory framework must be consistent with generally applicable rules and requirements; and
• the framework must allow "the United States to be the best place in the world to innovate." [19 Aug 2025]#Blockchain

U.S. Treasury requests comment on detecting illicit activity involving digital assets

The U.S. Department of the Treasury hasissuedarequest for commenton innovative methods, techniques, or strategies that regulated financial institutions use (or could use) to detect illicit activity involving digital assets. The Treasury is particularly interested in application program interfaces (APIs), AI, digital identity verification, and use of blockchain technology and monitoring.

This initiative is mandated by the GENIUS Act and supported by Executive Order (E.O.) 14178.

Feedback is requested within 60 days of publication in the Federal Register (i.e. by October 17, 2025). [18 Aug 2025]#DigitalAsset #AI

Fed sunsets novel activities supervision program

The Fed hasannouncedthat it will sunset its novel activities supervision program. Since commencing the program to supervise certain crypto and fintech activities in banks, the Fed has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, it is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program. [15 Aug 2025]#Crypto #DigitalAsset