FinTech Global FS Regulatory Round-up - W/e 22 May 2026

ICYMI

• Transparency obligations for AI‑generated content under the EU AI Act: From principle to practice
• UK Government Report on Copyright and AI concludes more evidence is needed although s9(3) CDPA could go

Global

BCBS meeting: ICT risk management, cryptoasset prudential standard, updates to liquidity risk principles

The Basel Committee on Banking Supervision (BCBS) has published a summary of its meeting held on 19 and 20 May 2026 in Basel to discuss a range of issues including: the outlook for financial stability; digitalisation; cryptoassets; liquidity; macroprudential policy; and the financial risks associated with extreme weather events.

On digitalisation, the BCBS agreed to publish a report on a range of information and communication technology (ICT) risk management approaches to non-malicious incidents. It also discussed the feedback received to its consultation on machine-readable Pillar 3 disclosures, and agreed that an update on this work will be provided later in 2026.

On cryptoassets, the BCBS took note of the progress of the review of targeted elements of its prudential standard for banks' cryptoasset exposures. An update will be provided later this year.

On liquidity, the BCBS agreed to consider targeted updates of its principles on liquidity risk.  An update will be issued later in 2026. [21 May 2026] #DigitalAsset #Crypto #ICT

UK

FSCP responds to draft SI amending crypto regulations

The Financial Services Consumer Panel (FSCP) has published its response to HM Treasury’s draft statutory instrument (SI) amending the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The FSCP considers that, on the whole, the measures set out in the draft SI represent a pragmatic approach to enabling UK-issued stablecoin payment services to operate before the full reforms are in place. However, it holds that the legislation primarily benefits industry, with consumer protections remaining incomplete until the wider payments reforms are implemented. The FSCP emphasises that consumer protection must not lag behind industry requests and competitiveness objectives. [22 May 2026]  #DigitalAsset #Crypto

PSR consults on financial reporting for payment schemes

The Payment Systems Regulator (PSR) has published a consultation on proposals to require card schemes to report their UK financial performance, so the regulator can better monitor and assess scheme profitability over time. The proposals follow the PSR's market review into card scheme and processing fees.

The proposed targeted regulatory financial reporting measures would require the schemes to provide a profit and loss account for their UK card operations, with relevant levels of disaggregation, alongside contextual information to support ongoing supervision.

The PSR expects to publish its final decisions on the Information, Transparency and Complexity (ITC) and Pricing Governance remedies in Summer 2026. [21 May 2026]  #Payments

FSSC report: A workforce transformed – technology, skills and the future of work in financial services

The Financial Services Skills Commission (FSSC) has published its first report to HM Treasury setting out how AI and other disruptive technologies are reshaping roles, tasks and skills across the financial services sector. Key findings include:

• AI is set to fundamentally change up to 50% of tasks in most financial services roles;
• the sector will need to recruit and train 450,000 highly skilled people over the next ten years; and
• failure to address skills gaps at the scale of the challenge will pose a serious threat to economic growth.

The FSSC will now undertake a second phase focused on developing practical recommendations for firms, HM Government and the wider skills system. A final report is expected by early 2027. [21 May 2026]  #AI

FCA issues warning regarding fake insurance sold on social media

The FCA has issued a statement to warn young drivers about 'ghost broking' scams where criminals pose as legitimate insurance sellers and offer bogus insurance policies through social media and messaging platforms.

The policies they sell are either fake, invalid due to falsified details, or cancelled shortly after purchase. Victims are left unknowingly uninsured and at risk of prosecution, fines and even having their car seized. The regulator stated that it is working with social media influencers to warn young drivers about the growing threat of ghost broking. [20 May 2026]  #SocialMedia

Regulatory Initiatives Grid – May 2026

The Financial Services Regulatory Initiatives Forum has published the tenth edition of the Regulatory Initiatives Grid which sets out the regulatory pipeline for financial services for the next two years. 

The Grid is organised by sections, often determined by sector. The ‘Multi-sector’ section covers initiatives that span more than one sector. Sector-specific sections include payments and cryptoassets. 

The Forum is comprised of the FCA, the PRA/Bank of England (BoE), the PSR, the Competition and Markets Authority (CMA), the Financial Reporting Council (FRC), The Pensions Regulator (TPR), and the Information Commissioner's Office (ICO), with HM Treasury attending as an observer member.

The Forum welcomes feedback on how the Grid has been useful for stakeholders in planning for regulatory initiatives and where improvements can be made. [19 May 2026]  #DigitalAsset #Crypto #Payments

BoE speech: Modernising money and markets

The BoE has published a speech by its Deputy Governor for Financial Stability, Sarah Breeden, at City Week 2026 on the regulator’s vision for UK finance. Ms Breedon articulates this vision as a robust, multi-money retail payments system that promotes greater competition and innovation, and a multi-asset, multi-currency approach to tokenising UK markets.

Ms Breeden spoke about how the responsible adoption of tokenisation in the UK can enhance financial stability and support sustainable growth, not only in retail payments but also in financial markets and the services they provide to the UK and global economies. She highlighted what the BoE has done and plans to do, in collaboration with authorities, HM Government and industry, to make its vision a reality.

She also noted that, with regard to the potential for a UK retail central bank digital currency – a digital pound – the BoE and HM Treasury will set out the conclusions of the design phase later in 2026. [19 May 2026]  #Tokenisation #DigitalAsset #CBDC #DigitalPound

FCA/BoE set out vision for tokenisation in UK wholesale markets

The FCA and the BoE have published a call for input which sets out the regulators’ vision for how tokenisation can develop safely in UK wholesale markets. The paper:

• outlines a potential framework to consider the future use of tokenisation in wholesale markets, both the long-term end state and the transition to it;
• makes clear the most important infrastructure, policy and regulatory principles and operational considerations that the regulators propose to follow in any future changes to policy and regulations;
• makes specific proposals in areas including the regulatory regime for issuing and exchanging digital assets, prudential and collateral treatment, and central bank money settlement of digital asset transactions; and
• offers an initial roadmap of initiatives that will support market evolution.

Responses to the call for input are requested by 3 July 2026. The regulators aim to publish a joint response statement and a full cross-authority roadmap later in 2026. [18 May 2026]  #Tokenisation #DigitalAsset 

PRA: Dear CEO letter on prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures

The PRA has published a template version of the letter sent to CEOs of banks and designated investment firms to provide an update on its expectations for managing the prudential risks from cryptoasset exposures. The letter replaces previous expectations outlined in the 2022 letter and should be read alongside the Dear CEO letter on deposit-takers’ innovations in deposits, e-money and stablecoins.

The PRA states that, in practice, the expectations outlined in this letter mean that firms should continue to apply the risk controls and expectations previously set out by the PRA, while recognising that certain forms of cryptoassets may benefit from a more risk-sensitive prudential treatment (that remain in line with existing PRA rules).

These expectations will continue to be on an interim basis until the PRA publishes its proposed future prudential framework following the completion of the Basel Committee on Banking Supervision’s (BCBS’) targeted review of cryptoasset standards. The PRA therefore expects to consult on a proposed framework in 2028 at the earliest.

The annex to the letter summarises the key areas in which the PRA’s expectations reaffirm, update or clarify those set out in the 2022 Dear CEO letter on cryptoasset exposures. [18 May 2026]  #Tokenisation #DigitalAsset #Crypto #Stablecoin

PRA: Dear CEO letter on innovations in use of deposits, e-money and stablecoins

The PRA has published a template version of its letter to CEOs of banks and deposit takers to clarify its expectations in respect of innovations in the use of deposits, e-money and stablecoins. The letter reaffirms the broad expectations set out in the 2023 letter and provides some additional information on how those expectations should be interpreted in light of developments since the original letter was issued.

The current letter focuses on risks that arise specifically in a retail context. The PRA remains concerned about the risks of contagion that may arise if deposit-taking entities were to offer e-money or stablecoins under the same branding as their deposits.

The letter’s annexes include a summary of the PRA’s expectations on innovations in the use by deposit-takers of deposits, e-money, regulated stablecoins, digital money and money-like instruments.

This letter should be read alongside the Dear CEO letter on the prudential treatment of banks’ cryptoassets exposures. [18 May 2026]  #DigitalAsset #Stablecoin #e-Money

NCSC: Adopting agentic AI and using AI to find system vulnerabilities

The National Cyber Security Centre (NCSC) has published two blogs:

• Thinking carefully before adopting agentic AI summarises the content of the NCSC’s new jointly-developed guidance: Careful adoption of agentic AI services. The guidance explains ‘why organisations should start small, use agents only for low-risk tasks, and apply established cyber security controls from the outset’. The article sets out the risks associated with the use of agentic AI, calls on organisations to take a careful approach to development and adoption, and emphasises the need for human accountability.
• Another post sets out ten questions which organisations are encouraged to consider when deciding whether to use AI models to find system vulnerabilities. [18 May 2026]  #AI

Europe

EC consults on review of MiCAR

The European Commission (EC) has published a set of consultations on the functioning of the EU’s regulatory framework on cryptoassets, the Markets in Cryptoassets Regulation (MiCAR). The public consultation seeks to obtain high level information on individuals’ general levels of awareness, experience, and views in relation to the different types of digital assets and associated services they may be using. The targeted consultation covers more technical and legal questions for stakeholders such as digital asset issuers and service providers, financial institutions, and technology providers.

Feedback will inform the EC’s assessment of whether MiCAR remains fit for purpose in light of the initial implementation and market and policy developments since its entry into application. It will also feed into an EC report on MiCAR application and the latest developments in cryptoasset markets.

Responses are requested by 31 August 2026. [20 May 2026]  #DigitalAsset #MiCAR #Crypto

Australia

APRA's latest System Risk Outlook highlights resilience as geopolitical and technological risks intensify

The Australian Prudential Regulation Authority (APRA) has intensified its oversight of banks, insurers and superannuation trustees as geopolitical tensions, AI and growing complexity in global markets reshape the risk environment. The latest edition of APRA's System Risk Outlook reinforces that Australia's financial system is well-prepared to withstand a range of downside scenarios, including a global recession combined with higher funding costs and operational disruptions. Key risks identified include:

• AI being adopted rapidly across all regulated industries, with governance arrangements not maturing at the same pace, and cyber threats becoming more sophisticated, including from advanced AI models; and
• private credit risks growing internationally, with Australian institutions exposed to offshore developments through multiple channels, creating potential spillover risks that warrant close monitoring.

APRA Chair John Lonsdale said the regulator will continue to assess how regulated entities are being impacted by overseas events and will seek further uplift in cyber security capabilities and AI governance.  [21 May 2026]  #AI #Cybersecurity

ASIC: New research suggests Australia is well-placed to unlock opportunities from innovation in the financial system

New research released by the Australian Securities and Investments Commission (ASIC) and conducted by the Digital Finance Cooperative Research Centre (DFCRC) shows Australia is well-placed to harness an ongoing surge of financial innovation, with AI becoming embedded in everyday financial operations, including credit underwriting, claims processing, portfolio management and disclosure. Australia has been identified as a global leader in some areas, including its ‘world-class’ payments infrastructure and ‘pioneering’ buy now pay later sector.  [21 May 2026] #AI

Hong Kong

Government to amend legislation to implement Crypto-Asset Reporting Framework and revised Common Reporting Standard

The Government has gazetted the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026, and will introduce the amendment bill into the Legislative Council (LegCo) for first reading on 3 June 2026.

As part of efforts to enhance tax transparency and combat cross-border tax evasion, the amendment bill seeks to (see further details in the LegCo Brief):

• Implement the Crypto-Asset Reporting Framework and the latest amendments to the Common Reporting Standard developed by the Organisation for Economic Co-operation and Development (OECD); and
• Make technical amendments for the implementation of the global minimum tax under OECD’s Base Erosion and Profit Shifting 2.0 framework.

The Government has taken into account the views from stakeholders (including professional bodies and the financial and crypto-asset sectors) from the public consultation launched in December 2025 (see our previous update).  The stakeholders generally supported the legislative proposals.

The OECD published the Crypto-Asset Reporting Framework in 2023 to provide for annual automatic exchange of tax information on crypto-asset transactions with relevant jurisdictions, and incorporated into the Common Reporting Standard new digital financial products and enhanced reporting and due diligence requirements.

Under the proposed regime, crypto-asset service providers with a reporting nexus with Hong Kong will be required to register with the Inland Revenue Department (IRD) and comply with requirements including due diligence, return filing and record keeping.

The Government plans to implement the new regime in 2027.  Subject to the implementation progress of relevant jurisdictions, Hong Kong plans to commence the automatic exchange of tax information on crypto-asset transactions in 2028 and implement the revised Common Reporting Standard in the same year.  The IRD will issue guidance in due course and provide technical support to assist the industry in complying with the new requirements.  [20 May 2026]  #DigitalAsset #Crypto

Singapore

MAS revokes entity’s Major Payment Institution Licence

MAS has revoked the Major Payment Institution Licence of an entity with effect from 14 May 2026. The entity is no longer permitted to provide digital payment token services in Singapore under the Payment Services Act 2019 (PS Act) from the same date. [20 May 2026]  #Payments

Malaysia

SCM issues revised Guidelines on Recognized Markets for DAX

The Securities Commission Malaysia (SCM) has issued an enhanced edition of its Guidelines on Recognized Markets. The revised Guidelines aim to:

• speed up product launches on regulated digital asset exchange (DAX) platforms by streamlining the approval process, while holding DAX operators to higher standards of accountability;
• fortify investor protection by strengthening client asset safeguards and enhancing the governance framework; and
• enhance the operational resilience of regulated DAX platforms by raising requirements for financial stability, shareholding and management proficiency.

In addition, DAX operators will be included as members of the Financial Markets Ombudsman Service (FMOS) in 2026.

The SCM also notes that it is closely monitoring the market and highlights recent administrative actions.

The amendments in the Guidelines are with effect from 20 May 2026. [20 May 2026]  #DigitalAsset

Thailand

SECT, BoT, and OIC collaborate on Responsible Voices for Finfluencers Project

The Securities and Exchange Commission Thailand (SECT) has announced that, in collaboration with the Bank of Thailand (BoT) and the Office of Insurance Commission (OIC), it is progressing the Responsible Voices for Finfluencers Project (Class 3). To date, the three regulatory authorities have organized two classes of the Project, with a total of 74 pages/channels participating and a combined following of up to 28 million accounts. The continued implementation of this Project is aligned with the SECT Strategic Plan 2026–2028, which aims to promote investors’ sound financial well-being and foster a long-term investment culture. [20 May 2026]  #SocialMedia #Finfluencers

India

IFSCA: Clarification on fee structure applicable to existing ASPs and TechFin entities

The International Financial Services Centres Authority (IFSCA) has issued a circular: Clarification on the fee structure applicable to existing Ancillary Service Providers and existing TechFin entity, which clarifies that the fee structure specified under the Fee Circular also applies to existing ancillary service providers (ASP) and existing TechFin entities continuing their operations pursuant to the transition.

Further, as a one-time measure, the applicable fees for the Financial Year 2026-27 may be remitted to IFSCA on or before 31 May 2026, in the manner specified under the Fee Circular.

The circular has immediate effect. [21 May 2026]  #TechFin

RBI publishes Payment System Report, December 2025

The RBI has published the Payment System Report, December 2025. This report, in addition to analysing payments trends in India over the last five calendar years up to the second half of the calendar year 2025, covers major recent regulatory developments in the domestic payments ecosystem. It discusses the role of central counterparties (CCPs) in strengthening India’s financial stability by mitigating counterparty credit risk issues in cross-border payments and the efforts made by the RBI, as part of the G20 Roadmap, to improve efficiency and facilitate technical innovations. [18 May 2026]  #Payments

US

Federal Reserve proposes new payment account to broaden direct access to Fed payment services

The Federal Reserve Board (Fed) has published a proposal to establish a "payment account," which legally eligible financial institutions could use for the specific purpose of clearing and settling their payments. The proposal responds to changes in the payments landscape which have seen financial institutions with an increasingly wide range of business models seeking direct access to the Fed's payment services to reduce costs and increase payment speed; many requests have come from institutions that are not federally insured.

The proposed payment account is substantially similar to the prototype outlined by the Fed in December 2025, with payment account holders having no access to intraday credit or the discount window, earning no interest on balances held at a Reserve Bank, and only having access to payment services with automated controls to prevent overdrafts. The proposal would not expand or otherwise change legal eligibility for access to accounts or payment services from the Federal Reserve, and affirms that Reserve Banks would expect payment account holders to mitigate illicit finance risks. The proposal includes some limited changes from the earlier request for information; notably, closing balance limits would be based on an institution's expected payment activity and the maximum closing balance was increased.

Comments on the proposal are requested within 60 days of publication in the Federal Register. Reserve Banks are encouraged to temporarily pause decisions on access requests from institutions falling within Tier 3 of the Account Access Guidelines until the policy development process is complete.  [May 20, 2026]  #Payments