On 20 November 2025 the Hogan Lovells Payments Conference in London brought together banks, payments firms, fintechs, regulators and policymakers to weigh competing priorities for the year ahead: accelerating AI-driven innovation across the payments value chain, the rise of digital currencies such as stablecoins and CBDCs, and the need for regulation that balances consumer protection with enabling growth. According to the Hogan Lovells newsletter, sessions also highlighted cybersecurity, fragmentation risks, and the continued prominence of fraud prevention, BNPL and alternative payments as industry focal points.[1]

Regulatory movement has been brisk across jurisdictions, with the European Union, the United Kingdom and the United States advancing materially different but mutually reinforcing initiatives. The European Parliament and Council have reached a provisional political agreement on the proposed PSD3 directive and a Payment Services Regulation, signalling a fresh phase of harmonisation for payment services in the EU. The European Banking Authority has meanwhile published a peer review assessing PSD2 authorisations, noting improved supervisory efficiency but persistent divergences in governance and anti-money laundering controls that risk regulatory arbitrage.[1]

In the UK the government has published a policy update on a provisional authorisation regime designed to let innovative, early-stage firms operate under time-limited FCA permissions while they mature towards full authorisation. The paper proposes licences of up to 18 months, proportionate assessment of threshold conditions and continued rule compliance during the provisional period; primary legislation will be required to bring the regime into force.[1] Complementing this, the Financial Services Regulatory Initiatives Grid and letters from the FCA and PRA set out a crowded timetable of payments priorities including possible overnight safeguarding facilities for non-bank PSPs in the Bank of England’s RTGS service, contactless limits, safeguarding assurance standards and PSR market reviews on card and cross-border fees.[1]

Digital‑asset policy is advancing in parallel. The UK’s FCA has launched a dedicated stablecoin cohort in its Regulatory Sandbox to test issuance under the forthcoming regime and invited applicants to apply by 18 January 2026, reflecting an overt push to learn from live tests as rulemaking continues. The US Securities and Exchange Commission has signalled a different approach: SEC Chair Paul Atkins described plans for an “innovation exemption” to permit supervised, conditional on‑chain experimentation while broader Project Crypto rulemaking progresses, aiming to move away from regulation-by-enforcement towards structured relief with investor‑protection safeguards.[1]

Globally, central banks and international standard‑setters are grappling with crypto exposure and tokenisation risks. The Basel Committee has expedited a review of targeted prudential standards for banks’ cryptoasset exposures after controversial high risk weightings, and the Bank for International Settlements published analysis on tokenised money market funds highlighting liquidity and mismatch risks. These developments come as bank-led stablecoin initiatives gain traction, with Klarna announcing plans for a dollar‑backed token and a consortium of European banks forming Qivalis to launch a euro‑pegged stablecoin, underscoring competition to the dollar‑centric stablecoin landscape.[1]

At the same time practical market infrastructure changes are expanding cross‑border payment options and inclusion. On 2 December 2025 China and Vietnam launched a bilateral QR‑code payment connection enabling Chinese visitors to pay Vietnamese merchants via VietQR using China’s mobile payment tools, a move aimed at increasing local‑currency usage for tourism and trade. New payments products and partnerships are proliferating: Visa announced several digital wallet projects across Europe, Ripple secured an expanded Singapore payments licence, Klarna and Stripe‑aligned blockchain developments continue to test real‑world settlement use cases, and firms such as Western Union, Pago Fácil and Pomelo have introduced prepaid rails to boost remittance access in Argentina.[1]

Concern about fraud and scams remains central to policy responses. New Zealand’s Open Banking rollout under the Customer and Product Data Act 2025 and an updated Code of Banking Practice introduced enhanced scam protections, confirmation‑of‑payee, transaction blocking and compensation frameworks. Australia’s Treasury has consulted on mandatory anti‑scam obligations for banks, telcos and major platforms under its Scams Prevention Framework, proposing industry codes, proactive measures and a single external dispute resolution route through the Australian Financial Complaints Authority.[1]

The UK legislative environment is also shifting in ways that materially affect banks and e‑money institutions. The Public Authorities (Fraud, Error and Recovery) Act 2025, which received Royal Assent on 2 December 2025, gives ministers and DWP new notice and direct‑deduction powers over accounts for recovery of fraudulent or erroneous payments, along with penalties for non‑compliance; industry will face implementation costs and reputational risk once secondary legislation commences.[1] Parallel tax and reporting changes from the UK Autumn Budget will require UK crypto‑service providers to report CARF data from 1 January 2026, while HMRC explores simplifications to DeFi taxation such as potential “no gain, no loss” treatments for certain disposals.[1]

Taken together the past month’s developments show an industry in fast transition: regulators increasingly favour controlled experimentation and tailored relief for innovators even as they tighten consumer protections, anti‑fraud measures and prudential controls. Market entrants are testing tokenised rails and wallets in live environments while central banks and supervisors push back with targeted standards and, in some cases, tighter prudential treatment. For firms and policymakers the challenge for 2026 will be coordinating these strands so that innovation is permitted to scale without magnifying operational, stability or consumer‑protection risks.[1]

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  • [1] (JD Supra / Hogan Lovells Payments Newsletter) - Paragraph 1, Paragraph 2, Paragraph 3, Paragraph 4, Paragraph 5, Paragraph 6, Paragraph 7, Paragraph 8

Source: Noah Wire Services