1. FCA selects 4 firms to test stablecoin innovation in its Regulatory Sandbox (February 25, 2026)
The stablecoins cohort is part of the FCA’s commitment to supporting growth and innovation in UK financial services. 20 applications were received and the FCA has chosen the following firms:
Monee Financial Technologies; ReStabilise; Revolut; VVTX.
The Regulatory Sandbox programme allows firms to trial stablecoin products in real world conditions with appropriate safeguards. It will help the FCA assess its proposed policy in a live environment and ensure future rules are clear, effective and support responsible innovation.
The FCA’s testing will primarily focus on stablecoin issuance. The 4 selected firms’ proposals represent a range of stablecoin use cases, including payments, wholesale settlement and crypto trading. Each firm will receive feedback from FCA specialists while helping to shape the UK’s regulatory approach.
The testing is part of the FCA’s broader work to enable innovation across UK financial services and complements other innovation initiatives such as the Digital Securities Sandbox (DSS).
Testing begins in Q1 2026 and the findings will help shape the UK’s final stablecoin rules later in 2026.
For more Information click here.
2. New protections confirmed for Buy Now Pay Later borrowers (February 11, 2026)
Buy Now Pay Later (BNPL) borrowers will benefit from stronger protections from 15 July 2026, following the Government’s decision to bring the sector under the FCA’s regulation.
BNPL will be subject to the Consumer Duty and consumers will benefit from:
- Clear information: Consumers will get clear, upfront details about their agreement, including when payments will be due, amounts, and what happens if they miss a payment.
- Affordability checks: Lenders must carry out proportionate checks to make sure customers can afford to repay what they borrow before offering BNPL.
- Support when needed: Lenders will need to offer support to customers in financial difficulty, and, where appropriate, direct them to free debt advice.
- Complaints and compensation: If something goes wrong, consumers will be able to complain to the Financial Ombudsman Service.
BNPL provides an important source of credit for many, but there are no protections in place currently for those who use it repeatedly and may not be able to afford it. The aim of the new regulation is to help consumers navigate their financial lives, with appropriate support for consumers.
For more Information click here.
3. The Payment Systems Regulator (PSR) has fined Bank of Ireland UK for failing to implement Confirmation of Payee by the required deadline (February 19, 2026)
Bank of Ireland UK plc (BOIUK) has been fined £3,779,300 for implementing a system to send requests for Confirmation of Payee (CoP) checks 14 months after the deadline. As a result, the safeguard was not applied to transactions involving more than 1.14 million new payees, with payments totalling approximately £6.9 billion.
BOIUK were directed to have a system in place to send and receive CoP requests by 31 October 2023. CoP allows people to confirm the account they’re sending money to is the one they expect. It’s an important mechanism in combating fraud and in giving people confidence when making online payments.
Payment service providers had ample time to put the measure in place, after the PSR confirmed the requirement in October 2022. BOIUK were the last Group 1 payment service provider to achieve compliance.
For more Information click here.
4. The Payments Vision Delivery Committee – comprising HM Treasury, the Bank of England, the FCA and the PSR – published its Payments Forward Plan (26 February 2026)
The Plan sets out upcoming initiatives across retail and wholesale payments, including aspects relating to digital assets, and is intended to provide clarity on what is coming and when so firms can plan ahead and focus on innovation. The Plan also sets out actions to deliver the UK Government’s National Payments Vision for a trusted, world-leading payments ecosystem built on next-generation technology, offering consumers and businesses choice in payment methods; the Committee further noted it will continue to consider the cumulative impact on firms and support competition, innovation and economic growth, and agreed to add an enhanced focus on payments to the Regulatory Initiatives Grid starting with its first 2027 publication.
For more Information click here.
5. Basel Committee discusses recent market developments and targeted review of cryptoasset standard (25 February 2026)
Financial stability outlook – Committee members discussed recent market developments and the outlook for the global banking system. The Committee also considered vulnerabilities in government bond-backed repo markets in light of a recent Financial Stability Board report. It noted that its recently finalised guidelines on counterparty credit risk management set expectations for banks’ securities financing transactions and collateral management and agreed that effective implementation by supervisors and banks should help address some of these vulnerabilities. The Committee will monitor progress on implementation.
Cryptoassets – In response to recent cryptoasset market developments, the Committee has accelerated its review of targeted elements of its prudential standard for banks’ cryptoasset exposures. The Committee noted progress and will provide a further update later this year.
Implementation – The Committee approved a technical amendment to the standardised approach to operational risk following its earlier consultation and also approved a response to a frequently asked question related to the market risk framework. Both are expected to be published in March.
For more Information click here.
6. CFTC Staff Reissues Letter 25-40 Updating Payment Stablecoin Definition (6 February 2026)
The definition of “payment stablecoin,” clarifying that a national trust bank may qualify as a permitted issuer for purposes of the division’s no-action position. The underlying no-action relief (first issued on 8 December 2025) addresses certain requirements applicable to futures commission merchants that accept non-securities digital assets – including payment stablecoins – as customer margin collateral and hold certain proprietary payment stablecoins in segregated customer accounts. The CFTC explained that the update was prompted by the recognition that some stablecoins meeting the letter’s criteria may be issued by national trust banks, which staff did not intend to exclude; accordingly, the definition was expanded. CFTC Chair Michael S. Selig welcomed the change, noting the role of national trust banks in the stablecoin ecosystem and positioning the update as supportive of tokenised collateral and payment stablecoin innovation in the US.
For more Information click here.
