Catch up on our webinar on the UK’s proposed legislation for regulating cryptoassets.
UK
Digital assets
- FCA consults on stablecoin rules: The Financial Conduct Authority is consulting on draft rules for the activities of issuing a qualifying stablecoin and safeguarding qualifying cryptoassets. It builds on feedback to a discussion paper, DP23/4 (covered in our December 2023 update). Among other things, the FCA proposes restricting the assets that issuers can hold to secure their stablecoins, although the list is longer than that proposed in DP23/4. The FCA also expects the backing assets to be held on trust for stablecoin holders. The consultation closes on 31 July 2025.
Read our blogpost: FCA proposes rules for stablecoin issuance and cryptoasset custody
- FCA consults on prudential rules for crypto firms: In CP25/15, the FCA proposes prudential rules for firms that issue qualifying stablecoins and firms that safeguard qualifying cryptoassets. The FCA has drawn on the Investment Firms Prudential Regime as inspiration for its proposals. The consultation closes on 31 July 2025.
Read our blogpost: FCA proposes MiFID-style capital requirements for crypto firms
- Upcoming deadline on FCA discussion paper: The FCA has opened a discussion paper on regulating cryptoasset activities. HM Treasury intends to use draft legislation (covered in our May 2025 update) to bring some crypto-related activities into the regulatory framework. The FCA paper shows the FCA’s thinking on what rules should apply to firms under the incoming regime. The deadline for feedback on the discussion paper is 13 June 2025. The FCA plans to consult on proposed rules and guidance over the summer.
Read our blogpost: FCA seeks views on its future cryptoasset regime
Payments
- De-banking regulation finalised: HM Treasury has confirmed measures designed to regulate ‘de-banking’. New legislation adds conditions for banks, e-money firms and other payment service providers when terminating certain contracts with customers. Changes include mandating longer notice periods for account termination and requiring clear explanations for such terminations. There are limited exceptions to enable payment service providers to comply with their obligations under financial crime law. Firms have until 28 April 2026 to implement the incoming changes.
Read our blogpost: New rules to protect against de-banking: what payment service providers need to know
- PSR consolidates APP rules: The Payment Systems Regulator has published a consolidated policy statement on the authorised push payment scams reimbursement requirement. PS25/5 is intended to act as a single point of reference. It also includes summaries of frequently asked questions and the requirements for reimbursement of APP fraud committed over the CHAPS payment system.
BNPL
- UK to regulate buy-now, pay-later: The Government is introducing legislation which will bring BNPL agreements into the scope of UK regulation. Third party BNPL providers will need to be authorised and subsequently supervised by the FCA; BNPL provided by merchants will remain exempt subject to ongoing review. The new regime will take effect next year, subject to transitional provisions. The Government has instructed the FCA to finalise its rules for BNPL providers within the next year.
Read our blogpost: UK to regulate buy-now, pay-later: Your next instalment is due
EU
AI
- EU guidance on AI literacy requirement: The EU AI Act mandates that providers and users of AI systems must ensure their staff have a clear understanding of the AI they employ. A recent Q&A document from the European Commission offers further detail on the practical implications of this rule and its enforcement. The document indicates that, in certain cases, organisations may also need to train service providers and clients. Although the AI literacy requirement took effect on 2 February 2025, enforcement starts in 2026.
Read our blogpost: EU guidance suggests firms may need to train clients and service providers on AI
- Parliament issues report on application of financial regulation to AI: The Committee on Economic and Monetary Affairs within the European Parliament has published a draft report on the impact of AI on the financial sector. The general approach of the paper is that, although there are risks associated with financial institutions’ use of AI, its use in the financial sector can bring numerous benefits.
Read our blogpost: European Parliament drafts demand for Commission to spell out how financial regulation applies to AI
Open finance
- More FIDA talks scheduled for June: The next trilogue talks on the EU’s draft financial data access regulation are expected to take place on 17 June. Ahead of that meeting, the Commission has provided a non-paper proposing ways to simplify the draft legislation.
Payments
- PSD3 update: The Council of the EU continues to consider its mandate for revising the Payment Services Directive and introducing a new Payment Services Regulation. Trilogue talks between the Commission, Council and Parliament to agree compromise versions of PSD3 and PSR1 will only begin once the Council has agreed its negotiating position. This appears unlikely to happen during the current Polish Presidency of the Council which ends on 30 June 2025.
General
- Digital ID included in Commission simplification strategy: The Commission has shared a strategy for making the EU Single Market “simple, seamless and strong” with the European Parliament and Council. Among other things, the strategy seeks more effective digitalisation to speed up doing business in the EU and, for example, highlights the benefits of the EU Digital Identity Framework. The Commission aims to complete the roll-out of EU Digital Identity Wallets across all EU Member States by Q4 2026.
- ESMA wants to meet with social media firms to tackle unauthorised financial ads: The European Securities and Markets Authority has called on social media and platform companies to take proactive steps to prevent the promotion of unauthorised financial services. In a press release, ESMA notes the increasing spread of online scams targeting retail investors and requests availability to arrange a meeting to discuss implementation options. ESMA’s action follows a recent statement by the International Organization of Securities Commissions. IOSCO asks regulators to respond vigorously to online harm, including by pressing for changes to their jurisdictional powers so they continue to provide an appropriately high degree of investor protection within the increasingly complex online environment.
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