International developments remain highly relevant to UK payments firms operating through overseas subsidiaries, serving international customers or relying on cross-border infrastructure. The most significant changes include the EU’s PSD3 and PSR package, MiCA, mandatory instant euro payments, the US federal stablecoin regime and longer-term plans for a digital euro. FATF’s updated payment transparency standard also points to future changes in cross-border payment data and AML requirements.
Developments covered
🟥 Urgent / significant impact
Markets in Crypto-Assets Regulation (MiCA)
MiCA establishes a harmonised EU regulatory framework for cryptoassets, covering issuance, custody, trading and marketing across the European Union.
The Regulation introduces a single licensing regime for cryptoasset service providers (CASPs), together with disclosure, prudential and conduct requirements, and a dedicated framework for stablecoins. Transitional arrangements allow existing firms time to become authorised, after which CASPs must hold the appropriate authorisation to continue operating. Member States may apply shorter transition periods.
Key dates
- 30 December 2024: MiCA fully applies
- 1 July 2026: Grandfathering period ends; CASP authorisation required
Legal issue/risk
Firms operating in the EU without MiCA authorisation after the transition period risk enforcement action and losing access to EU markets. MiCA also introduces new market abuse, disclosure and marketing requirements, while differences between the EU and UK crypto regimes may increase compliance complexity for firms operating across both jurisdictions.
Next steps
- Review whether your cryptoasset activities fall within MiCA’s scope and identify any authorisation requirements.
- Prepare authorisation applications where required, including governance and risk management arrangements.
- Update white papers, disclosures and marketing materials to comply with MiCA requirements.
- Review cross-border compliance where activities are subject to both MiCA and the UK’s cryptoasset regime.
🟧 Important, uncertain timing/impact
EU PSD3 & PSR: Proposed reforms to the EU payments framework
PSD3 and the Payment Services Regulation (PSR) will replace the current EU payments framework, introducing a more harmonised regime for payment service providers across the EU.
Following political agreement, the package will significantly reform the EU payments framework. The PSR will introduce directly applicable rules on conduct, transparency, fraud liability and open banking, while PSD3 will cover authorisation and supervision, integrating electronic money institutions into the payment institution regime. Key reforms include mandatory payee name/IBAN verification, changes to APP fraud liability, enhanced Strong Customer Authentication (SCA) requirements and more prescriptive open banking standards.
Key dates
- 2026: Final texts expected in the Official Journal
- +18 months: PSR applies; PSD3 transposition deadline
- +24 months: Payee name/IBAN verification and fraud liability rules apply
- +24 months (extendable to 30): Reauthorisation window for existing PIs and EMIs
Legal issue/risk
The reforms will introduce a more harmonised EU regime, reducing national discretion and creating new compliance obligations for firms operating across Member States. Changes to fraud liability, payee verification and EMI reauthorisation are likely to have the greatest operational impact.
Next steps
- Assess the impact of PSD3 and the PSR on existing PSD2 compliance programmes, particularly fraud controls, SCA and open banking.
- Begin planning for payee name/IBAN verification capabilities and any required systems changes.
- Existing EMIs should prepare for reauthorisation under the new framework and monitor the final legislation.
🟧 Important, uncertain timing/impact
EU Instant Payments Regulation (SEPA Instant)
The EU Instant Payments Regulation requires payment service providers to offer euro instant credit transfers that settle within 10 seconds, 24 hours a day, seven days a week.
The Regulation is designed to make instant euro payments the default across SEPA by requiring PSPs that offer standard euro credit transfers to also provide instant payments at no higher cost. It also introduces mandatory Verification of Payee and simplified sanctions screening to improve fraud prevention while maintaining fast payment processing. Implementation is phased across Euro and non-Euro Member States.
Key dates
- 9 January 2027: Non-euro area PSPs must receive instant payments; charge parity applies
- 9 April 2027: Euro area payment and e-money institutions must send and receive instant payments
- 9 July 2027: Non-euro area PSPs must send instant payments; Verification of Payee applies
Legal issue/risk
The Regulation introduces new operational and compliance obligations around instant payments, Verification of Payee and sanctions screening. Firms operating across the UK and EU should also consider interoperability and compliance across different payments frameworks.
Next steps
- Upgrade payment infrastructure to support SEPA instant payments and charge parity.
- Implement Verification of Payee and updated sanctions screening processes.
- Review fraud controls and operational readiness for the phased implementation dates.
- UK firms with EU operations should plan for the staggered implementation timetable.
🟧 Important, uncertain timing/impact
The GENIUS Act
The GENIUS Act establishes the first federal US regulatory framework for payment stablecoins, introducing licensing, prudential and reserve requirements for issuers.
The Act restricts the issuance of payment stablecoins to licensed entities and requires stablecoins to be fully backed, redeemable at par and supported by reserve segregation, independent audits and regular disclosures. It also clarifies the regulatory treatment of payment stablecoins under US law. Foreign issuers will only be able to operate where their home regulatory regime is considered “substantially similar” and certain US reserve requirements are met.
Key dates
- 18 July 2025: Act signed into law
- 18 January 2027, or 120 days after implementing rules (whichever is earlier): Regime takes effect
Legal issue/risk
The Act introduces significant prudential, operational and disclosure requirements for stablecoin issuers. Foreign firms may face additional barriers to entering the US market, particularly where the equivalence of their home regulatory regime is uncertain.
Next steps
- Assess whether your stablecoin activities fall within the scope of the new regime and determine any licensing requirements.
- Review reserve management, custody and disclosure arrangements against the new requirements.
- Foreign issuers should assess whether their home regulatory framework is likely to meet the Act’s “substantially similar” test and plan accordingly.
🟩 Long-term/indicative
Digital Euro
PSD3 and the Payment Services Regulation (PSR) will replace the current EU payments framework, introducing a more harmonised regime for payment service providers across the EU.
The proposed framework would introduce a retail central bank digital currency (CBDC) that can be used online and offline alongside existing payment methods. The legislation includes provisions on privacy, holding limits and legal tender status, while also setting the framework for consumer pricing and merchant access. Final implementation remains subject to legislative approval and an ECB decision to issue the digital euro.
Key dates
- 2026: EU expected to adopt digital euro legislation
- 2029: Earliest potential issuance, subject to ECB decision
Why it matters
No immediate obligations arise, but firms operating in Europe should monitor the development of the digital euro, particularly its potential impact on payment models, interoperability and future compliance requirements. Differences between the EU digital euro and UK digital currency initiatives may also affect cross-border payment services.
Next steps
- Monitor legislative progress and ECB decisions on the digital euro.
- Assess the potential impact on payment products, customer demand and operating models.
- Participate in industry engagement where relevant and consider future interoperability requirements.
🟩 Long-term/indicative
FATF updates Recommendation 16 (Payment Transparency)
The Financial Action Task Force (FATF) has updated Recommendation 16 to strengthen transparency requirements for cross-border payments and improve the traceability of payment information.
The revised Recommendation, renamed Payment Transparency, extends the Travel Rule beyond traditional wire transfers to cover cross-border payments and value transfers more broadly. It clarifies responsibilities across the payment chain, introduces more consistent originator and beneficiary information requirements for higher-value payments, encourages the use of payee verification and other anti-fraud tools, and clarifies the treatment of card payments. While the changes are not directly binding, they are expected to be reflected over time in national AML regimes, including the UK’s Money Laundering Regulations.
Key dates
- End of 2030: FATF implementation deadline for member jurisdictions
Why it matters
The changes do not create immediate obligations, but future UK implementation is likely to strengthen requirements around payment transparency, data quality and cross-border payment messaging. Firms should also monitor developments relating to payee verification and AML controls.
Next steps
- Monitor UK implementation through HM Treasury, the FCA and Money Laundering Regulation reforms.
- Assess the quality of cross-border payment data and alignment with structured messaging standards such as ISO 20022.
- Review plans for payee verification and other fraud prevention capabilities.
- Engage with industry initiatives as implementation guidance develops.