• Global: Stablecoins: Role in Capital Markets
• Asia: Singapore: AI Risk Management Toolkit for Financial Services Published; Hong Kong: Measures to Boost Virtual Asset Market Liquidity
• Europe: European Parliament Reviews Digital Asset Risks; AMLA Strategic Priorities for 2026-2028; AML Supervision Transferred from EBA to AMLA
• Middle East: UAE (Dubai): Guidance Published on Virtual Asset Issuance Frameworks
• UK: Agentic AI Use in Regulated Activities Clarified; UK Payments Reform Roadmap Published; Deferred Payment Credit Brought Within FCA Regulation
• US: Federal Reserve examines payment stablecoins in cross border payments; California’s governor issues AI procurement rules affecting payment systems; SEC clarifies application of securities laws to crypto assets; New York considers consumer protection regime for Buy Now, Pay Later

Global

ICMA publishes a paper on stablecoins in capital markets

On January 20, 2026, the International Capital Market Association (ICMA) published a paper assessing whether stablecoins offer practical value for capital markets. The paper notes rapid growth in stablecoins and increasing regulatory alignment on reserves, redemption rights, safeguarding and prohibitions on interest, while warning that regulatory fragmentation remains a key risk. The paper concludes that fiat‑backed stablecoins may support on‑chain settlement through programmable, always‑on transactions and liquidity beyond traditional market cycles. However, they also face limits linked to regulation, operational risk and higher costs associated with public blockchains.

Impact: For payment providers, market infrastructure operators and financial institutions involved in settlement and post‑trade processes, the paper reinforces that stablecoins are unlikely to displace existing payment or settlement arrangements in the near term. Instead, they may play a complementary role in specific use cases, such as enabling programmable or 24/7 settlement for tokenised securities or supporting liquidity outside traditional settlement windows. Companies exploring stablecoin‑based settlement should closely monitor regulatory developments across jurisdictions and carefully assess interoperability, operational risk and integration with existing payment and settlement systems before considering deployment.

Asia

Singapore: AI Risk Management Toolkit for financial services published

On March 20, 2026, the Monetary Authority of Singapore announced an AI Risk Management Toolkit for the financial services sector. The toolkit was developed with industry input from banks, insurers and capital‑markets firms and addresses risks arising from traditional AI, generative AI and agentic AI.

A core component is an Operationalisation Handbook providing practical guidance on implementing AI risk‑management frameworks. This is supported by industry case studies and aligns with MAS’ proposed AI Risk Management Guidelines, covering governance, risk identification, lifecycle controls and organisational enablers.

Impact: Payment service providers and financial institutions using AI in fraud detection, transaction monitoring, onboarding or credit decisioning should review the toolkit against existing governance frameworks. Businesses should ensure clear accountability for AI use, map AI systems across payment operations, assess material risks and ensure controls cover the full AI lifecycle.

Hong Kong: Commission launches initiatives to boost virtual asset market

On February 11, 2026, the Securities and Futures Commission (SFC) issued new measures to strengthen liquidity and resilience in Hong Kong’s virtual asset market. The SFC issued circulars allowing affiliated market makers to operate on licensed virtual asset trading platforms, subject to strict conflict‑management controls and independent oversight.

The SFC also issued guidance allowing licensed brokers to offer virtual asset margin financing to eligible margin clients. The measures aim to increase liquidity, diversify available products and support Hong Kong’s broader digital‑asset strategy, including through a high‑level framework for virtual‑asset perpetual contracts.

Impact: Businesses should align their strategies with the ASPIRe roadmap and prepare for increased liquidity, new products and higher regulatory expectations. The SFC will monitor implementation closely and engage with stakeholders to ensure a safe and competitive digital asset market.

Europe

EU: European Parliament publishes draft report on digital assets

On February 23, 2026, the European Parliament’s ECON Committee released a draft report on digital asset risks and opportunities, examining impacts on EU financial stability, market integrity, and existing rules such as MiCA and the DLT Pilot Regime. The report highlights concerns including AML risks, gaps in oversight of large multifunctional groups and limited data capabilities. It also urges clarity on stablecoin structures and monitoring of tokenisation trials.

Impact: Although the report has no direct or immediate impact on businesses, it is relevant for broader AML issues, operational models under MiCA, and projects under the DLT Pilot Regime. It signals that stronger oversight of large multifunctional groups could lead to increased reporting expectations. Businesses involved in stablecoin arrangements may wish to assess potential implications once recommendations develop further. Businesses exploring tokenisation should monitor the DLT Pilot Regime review, and businesses active in crypto assets should continue enhancing AML and sanctions screening controls.

EU: AMLA publishes 2026–2028 strategic programming document

On February 4, 2026, the EU Authority for Anti‑Money Laundering and Countering the Financing of Terrorism published its Single Programming Document for 2026–2028. The document sets out AMLA’s multi‑year objectives, planned activities and resources. Key activities include delivering regulatory mandates under the EU AML/CTF Single Rulebook, preparing for direct supervision of major financial institutions starting in 2028, enhancing FIU cooperation, and building risk analysis and data frameworks.

Impact: Financial institutions should expect evolving reporting and governance expectations. Businesses likely to fall under AMLA’s direct supervisory remit from 2028 should strengthen AML risk assessments, data capabilities and governance arrangements during 2026.

EU: EBA and AMLA complete AML/CFT mandate handover

On January 1^st, 2026, the European Banking Authority (EBA) and the Authority for Anti‑Money Laundering and Countering the Financing of Terrorism (AMLA) completed the handover of all AML/CFT mandates and functions from the EBA to AMLA. Key tools and expertise previously held by the EBA, including databases and supervisory insights, have been transferred. Existing EBA AML/CFT guidelines and standards remain in force until AMLA updates them.

Impact: AMLA’s strategic plan will significantly shape the EU AML and CTF framework over the next three years. Financial institutions may expect increased regulatory oversight, especially those likely to fall under direct supervision from 2028. Businesses should prepare for evolving reporting and compliance requirements aligned with AMLA’s expanding remit. The supervisory selection process and data collection starting in 2026 are critical preparatory steps toward direct supervision.

Middle East

UAE: Dubai clarifies token issuance rules

On April 9, 2026, Dubai’s Virtual Assets Regulatory Authority (VARA) published a guidance clarifying how virtual assets may be issued in Dubai. The guidance explains how VARA’s existing Virtual Asset Issuance Rulebook applies in practice. It focuses on how tokens are structured, disclosed and brought to market, rather than on trading activity.

The guidance sets out three issuance pathways covering stablecoins, asset‑referenced tokens and other virtual assets. Higher‑risk tokens, including stablecoins and real‑world asset tokens, are subject to stricter requirements. These include licensing, governance standards and enhanced disclosure obligations. Other tokens may be issued through VARA‑licensed intermediaries. The guidance aims to improve transparency and ensure risks are clearly explained at the point of issuance.

Impact: The guidance provides greater clarity for businesses looking to launch tokens in Dubai. Businesses planning stablecoin or asset‑backed token issuances should expect higher compliance requirements. Issuers will need clear governance arrangements and robust, well‑structured disclosure materials.

UK

UK: Regulators set out approach to agentic AI under existing law

On March 31, 2026, the Digital Regulation Cooperation Forum (DRCF) published a paper examining how existing UK legal and regulatory frameworks apply to agentic AI systems. Agentic AI refers to systems composed of multiple AI agents capable of acting autonomously on behalf of users, including making decisions or taking actions without direct human intervention.

While the paper is cross‑sectoral, it is relevant to the payments sector given the increasing use of autonomous AI tools in areas such as fraud detection, transaction monitoring, customer service, dispute handling, onboarding and elements of payment initiation. The DRCF confirms that the deployment of agentic AI does not displace or dilute existing regulatory obligations, including consumer protection, data protection, conduct and competition requirements.

Impact: Payment service providers and fintech using agentic AI should assume existing regulatory obligations apply fully, including where systems operate autonomously. Businesses should ensure clear human accountability, auditability and explainability for AI‑driven decisions affecting customers. Complaints handling, redress and data‑protection frameworks must remain effective where AI agents are used in payments processes. Businesses increasing AI autonomy in payments operations should prioritise governance and operational risk, as AI‑driven decisions may be harder to explain or challenge.

UK: Three‑year roadmap for payments reform published

On February 26, 2026, HM Treasury published the Payments Forward Plan, setting out the UK’s coordinated three‑year roadmap for payments regulation. The plan brings together upcoming work across retail payments, wholesale payments, Open Banking, digital assets and consumer protection, and is intended to present a consolidated timeline of major reforms to support planning and reduce duplication.

Impact: Payment companies should map the plan’s milestones against internal change programmes and budgeting cycles, particularly where reforms may affect infrastructure, fraud controls, data‑sharing and consumer protection expectations. Businesses should also prepare for new consultations flagged in the roadmap (including on payments law and Open Banking governance) and assess likely operational impacts early, so product, compliance and technology teams can align ahead of implementation windows.

UK: FCA finalises rules for Deferred Payment Credit

On February 11, 2026, the Financial Conduct Authority (FCA) published its final rules on the regulation of Deferred Payment Credit (DPC), formerly referred to as unregulated ‘Buy Now Pay Later’. The rules are set out in Policy Statement PS26/1 and will bring certain DPC agreements into the UK consumer credit regime from July 15, 2026.

The FCA confirmed that most of its existing Consumer Credit Sourcebook (CONC) rules will apply to DPC lending, including existing creditworthiness rules (which will apply even to lower-value purchases), alongside new DPC‑specific requirements. These include new rules for DPC lenders requiring them to provide mandatory pre‑contractual product information to borrowers,  enhanced customer communications where payments are missed, new guidance to remind firms of their obligations under the Consumer Duty and compliance with regulatory reporting obligations. Businesses without the relevant permissions must register for the Temporary Permissions Regime before the new rules take effect on July 15, 2026.

Impact: Payment companies, fintechs, lenders and merchants involved in offering or facilitating DPC should assess how the final rules affect their operating models, customer journeys and commercial partnerships. Article 60F of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 should be reviewed when considering this impact as the regime applies to third-party DPC lenders only, with merchant-provided instalment plans remaining exempt from regulation. Affected providers will need to implement proportionate affordability assessments, revise pre‑contractual disclosures, and ensure compliant treatment of customers in arrears. Companies without existing consumer credit permissions must register for the Temporary Permissions Regime between May and July 2026 and prepare for full FCA authorisation shortly thereafter, or otherwise cease offering DPC products once the new regime takes effect.

US

US: Federal Reserve examines payment stablecoins in cross‑border payments

On March 30, 2026, the Federal Reserve published a paper on payment stablecoins and cross border payments. The paper explores how payment stablecoins could make cross border transfers cheaper and faster. It focuses on individuals, businesses and small banks using stablecoins directly for international payments. The paper notes that current cross border payments are often slow and expensive due to multiple intermediaries. Stablecoins could shorten payment chains and improve speed and transparency. The paper also flags potential risks, including higher foreign demand for US dollars if stablecoins are widely adopted. Separately, an April 8 Federal Reserve note highlights growing financial stability concerns around stablecoins, including reserve quality and run risk, signalling an emerging area of supervisory focus.

Impact: For payment service providers, banks and corporates with significant cross‑border flows, the March 30 paper supports the view that payment stablecoins may deliver efficiency gains and cost savings over time. However, commercial adoption will depend on regulatory implementation, issuer compliance with emerging frameworks, and the ability to achieve meaningful cost savings at scale. Stablecoins should currently be considered a potential complement to, rather than replacement for, existing cross‑border payment rails. Businesses should closely follow US federal and state stablecoin rulemaking under the GENIUS Act. Ongoing engagement with banks, payment providers and regulators will be important as frameworks continue to develop.

US: California strengthens AI safeguards for state procurement

On March 30, 2026, California Governor Gavin Newsom issued an executive order strengthening AI safeguards for companies supplying AI‑enabled systems to the state, including systems used in financial administration and payment‑related functions. The order directs state agencies to raise procurement standards and require suppliers to demonstrate responsible AI governance.

While cross‑sectoral, the order is relevant to payment firms and fintech providing payment processing, benefits disbursement, fraud detection, or financial management systems to California public bodies. It focuses on safeguards against illegal content, harmful bias and civil‑rights violations, and introduces procurement‑driven requirements that may apply to AI used in payment decisioning and transaction‑related workflows.

Impact: Payment service providers and fintech supplying AI‑enabled payment systems or decisioning tools to California public authorities should expect additional procurement scrutiny. Companies may need to evidence governance, auditability and controls for AI used in payment processing, fraud prevention or eligibility decisions. Given California’s scale, the procurement standards developed under the order may also influence responsible AI expectations for payment systems beyond the public sector.

US: SEC clarifies application of securities laws to crypto assets

On March 17, 2026, the US Securities and Exchange Commission (SEC) issued an interpretation clarifying how federal securities laws apply to certain crypto assets and transactions involving crypto assets in coordination with the Commodity Futures Trading Commission. The interpretation sets out a taxonomy covering digital commodities, digital collectibles, digital tools, stablecoins and digital securities, and clarifies how securities laws apply to activities such as airdrops, protocol mining, staking and token (see also SEC factsheet).

Impact: Crypto and payment providers should review existing and planned products against the clarified framework, particularly where token features, incentives or marketing could give rise to an investment‑contract analysis. The interpretation provides a clearer basis for assessing regulatory risk across token launches, reward structures and staking models, and may influence product design and compliance strategies going forward.

US: New York introduces comprehensive BNPL consumer‑protection rules

On February 23, 2026, New York Governor Kathy Hochul announced proposed regulations establishing a comprehensive licensing and supervision framework for Buy Now, Pay Later providers. The New York Department of Financial Services published draft rules implementing the state’s BNPL legislation.
The proposals would bring both interest‑free and interest‑bearing BNPL products into New York’s consumer‑credit regime, introducing licensing requirements, enhanced disclosures, underwriting and affordability checks, fee limits, dispute‑resolution protections and strengthened data‑privacy standards.

Impact: BNPL providers, fintech platforms and bank partners with New York exposure should assess whether their products and operating models fall within scope of the proposed regime and prepare for significantly more prescriptive compliance obligations. Businesses should consider the impact on product economics, customer journeys, data practices and third‑party arrangements, and monitor the rulemaking process closely as the new framework is finalised.

Co-authored by Jonathan Botham

Further reading:

• FS+ Country Updates – January 2026
• Financial Services Regulatory Calendar 2026
• Insights: US – OCC proposed rulemaking implementing the GENIUS Act
• Insights: US – FDIC approves proposal to establish GENIUS Act application procedures for FDIC‑supervised institutions seeking to issue payment stablecoins