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UK
Digital assets
Payments
- Decision not to proceed with cap on cross border fees: The Payment Systems Regulator will hold off introducing an interim price cap on UK-EEA cross border interchange fees following a consultation (covered in our January 2025 update). In a statement the PSR explains it would be more effective to implement a cap in one step after it has determined the appropriate level for UK-EEA cross-border interchange fees.
Read the PSR statement.
- PSR and FCA respond to HM Treasury consultation on consolidation: In their response to HM Treasury’s consultation on their consolidation (covered in our October 2025 update), the Financial Conduct Authority and PSR emphasise the importance of clear legislative drafting and anticipate opportunities to adapt aspects of the Financial Services and Markets Act 2000 to payment systems regulation. The regulators also advise keeping payment system definitions under review, recognising the rapidly evolving nature of the sector, to ensure the framework remains effective and future-proof.
Read the FCA and PSR response. - FCA shares findings from romance fraud review: The FCA has reviewed how payment service providers detect, prevent and support victims of romance fraud. Losses from this type of fraud continue to rise, exceeding £106 million in 2024/2025. The findings show that while some firms deliver proactive, compassionate support and use effective data monitoring, performance is inconsistent across the industry. The review highlighted best practice measures for PSPs, including robust transaction monitoring, tailored victim care, data sharing, staff training to identify red flags, and enhanced support for vulnerable customers. The FCA states that firms should strengthen early detection, victim engagement and staff capabilities to counter emerging fraud tactics.
Read the FCA’s findings. - Blueprint for Digital Pound to land in 2026: The Bank of England and HMT are developing a blueprint for a possible digital pound. In an update the BoE says that next year it will publish the blueprint and the assessment on whether to proceed. If adopted, a digital pound would be rolled out through a staged roadmap.
Read the BoE update.
AI
- BoE describes its approach to innovation: The BoE has outlined its approach to AI, distributed ledger technology and quantum computing. By fostering responsible innovation and maintaining robust standards, the BoE aims to enhance financial system resilience and help enable sustainable economic growth. Its proposed actions include exploring AI risks through the AI Consortium, consulting on the proposed regulatory regime for systemic stablecoins before the end of the year and building its understanding of the risks and opportunities posed by quantum computing.
Read the BoE approach.
Operational resilience
- Regulators share advice on responding to cyber attacks: In a guidance note, the BoE, Prudential Regulation Authority and FCA share effective practices on responding to cyber attacks. They highlight the need for robust response and recovery capabilities, such as simulating destructive cyber scenarios, expanding impact tolerance metrics, and strengthening recovery through immutable back-ups and alternative communication channels. The regulators note the role of sector-wide collaboration, including intelligence-sharing and joint exercises. Boards should review assurance, scenario testing, data restoration, and communication strategies. As cyber threats evolve, firms are expected to make ongoing investments, continuously update self-assessments, and adapt strategies to safeguard their critical services and the wider financial system.
Read the BoE, PRA and FCA guidance.
General
- Tokenisation in the UK fund management industry: In a consultation the FCA proposes rule changes to enable direct-to-fund dealing and the use of tokenised registers. The FCA signals further openness to authorising public blockchains and stablecoins and encourages industry feedback on how these and tokenised assets can be integrated into fund operations. Feedback is due by 21 November 2025, with final rules planned for the first half of 2026.
Read our blogpost.
- UK unveils Scale-Up Unit: The Government has announced a new service to provide dedicated resource for fast-growing firms seeking support as they expand. Led by the FCA and PRA, it will initially be available to deposit-takers and insurers and then expand to other firms next year.
Read the Government’s press release.
EU
Digital asset
- EBA responds to Commission on reserve asset liquidity requirements: In a couple of opinions, the EBA highlights concerns that recent amendments to draft regulatory technical standards under MiCA could allow stablecoin reserves to be invested in less liquid assets and weaken existing safeguards. The EBA urges the Commission to align with MiCA’s liquidity and prudential requirements to mitigate liquidity risk and regulatory arbitrage, proposing revisions to ensure strong protections remain in place for the reserve composition and liquidity of crypto-asset issuers.
Read the EBA announcement. - ESMA releases new MICA Q&A: The European Securities and Markets Authority has released new Q&A under MiCA on distinguishing between different execution services and the treatment of cryptoassets admitted to trading before 30 December 2024.
Read Q&A 2653 and Q&A 2654. - ESRB comments on stablecoin regulation: The European Systemic Risk Board has released a report on stablecoins, crypto-investment products and multi-function groups. It suggests areas for policy attention, including the need to monitor the use of large, systemic non-compliant stablecoins within the EU, as well as their role in global financial markets.
Read the ESRB report.
Payments
- Digital euro moves to next phase: The Governing Council of the European Central Bank has decided to move to the next phase of the digital euro project. This completes the preparation phase which was launched in November 2023. The next phase will consider technical readiness and market engagement, as well as supporting the legislative process. If the EU co-legislators adopt the regulation on the establishment of the digital euro in 2026, a pilot exercise and initial transactions could take place as of mid-2027 and the first issuance of the digital euro could then happen during 2029.
Read the ECB press release. - EBA excludes payments firms from pooled accounts AML rule: The European Banking Authority has responded to the European Commission’s call for advice on mandates for the new Anti-Money Laundering Authority. Among other things, in its draft regulatory technical standards the EBA explicitly excludes payment institutions and e-money institutions from the simplified application of due diligence measures for pooled accounts. The EBA has also suggested clarifying the information to be collected for identifying and verifying the identity of users of virtual IBANs. The Commission will work with AMLA to take these proposals forward.
Read the EBA report.
AI
- Commission consultation on AI incident reporting to close: The Commission’s consultation on draft guidance and reporting template on serious AI incidents closes on 7 November. Under the EU AI Act, providers of high-risk AI systems will be required to report serious incidents to national authorities from August 2026.
Read the consultation. - Digital Omnibus: The Commission is expected to announce a package of proposals on digital regulation policy in November 2025. Any proposed changes will need to go through the EU’s ordinary legislative procedure.
General
- EBA publishes 2026 work programme: According to its 2026 Work Programme, the EBA will intensify its supervisory oversight of critical third party providers under DORA, with key thematic reviews and inspections to take place throughout 2026. Ongoing scrutiny of crypto-asset issuers under MiCA will continue. The EBA will also develop a payments compliance roadmap. These measures follow 21 recommended improvements from the recent regulatory framework review.
Read the EBA update. - 2025 Joint ESA stocktaking of BigTechs’ direct financial services activities in the EU: In a factsheet the European Supervisory Authorities note that 11 out of 13 BigTechs now offer regulated financial services in the EU. Key regulatory milestones lie ahead, with decisions on designating some BigTechs as critical ICT third party service providers under DORA and as gatekeepers under the Digital Markets Act.
Read the ESAs’ update.
International
Digital assets
- Implementing comprehensive regulatory frameworks for cryptoasset activities: Recent reports from the Financial Stability Board and IOSCO highlight growing progress in cryptoasset regulation while stressing the ongoing need for stronger global coordination. Key remaining challenges include inconsistent implementation, differences in national rules that could be exploited by market participants, and enforcement gaps. Looking ahead, regulators and standard setters are set to prioritise improved cross border cooperation, clearer regulatory definitions, and greater information sharing. These actions aim to align approaches internationally and ensure stable, transparent and well-regulated digital asset markets.
Read our blogpost: FSB and IOSCO review crypto regulation around the world
AI
- Monitoring adoption of AI and related vulnerabilities: In a report the FSB encourages financial authorities to strengthen monitoring of artificial intelligence adoption in the financial sector through clearer taxonomies and standardised indicators, especially regarding third-party dependencies and concentration risks. The FSB will support greater alignment and information sharing across jurisdictions to enhance risk assessment as use of generative AI grows.
Read the FSB’s report.
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