FinTech Global FS Regulatory Round-up - w/e 9 October 2026

Global

BIS paper: AI and climate change – balancing innovation and sustainability

The Bank for International Settlements (BIS) has published a paper examining AI’s direct environmental footprint, its contribution to climate mitigation and adaptation, and rebound effects arising from lower costs, higher productivity and wider adoption.

The paper finds that while AI can improve energy efficiency, optimise resource use, accelerate climate innovation and strengthen climate risk management, its development and deployment also require substantial computational resources, increasing electricity demand and, depending on the carbon intensity of electricity use, associated emissions. The paper considers two stylised scenarios: an ‘AI copilot’ scenario, where benefits and environmental costs build gradually and the net climate impact remains uncertain; and a more transformative scenario involving artificial general intelligence (AGI), where both potential benefits and environmental risks could become larger and more uncertain. The paper also reviews emerging policy responses and highlights the relevance of the AI-climate nexus for central banks.

The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks. [9 Oct 2026]  #AI

UK

BoE: CMORG biennial simulation exercise – SIMEX 26

The BoE has announced that the Cross-Market Operational Resilience Group (CMORG) completed its biennial simulation exercise, known as SIMEX 26, on 8 October. The exercise involved firms working alongside the financial services authorities to respond to a scenario focusing on global disruption to cloud-based services.

It also included a live meeting of the BoE-chaired Cross Market Business Continuity Group, which provides strategic direction to the sector’s collective response to systemic incidents. The BoE now expects firms to take action based on the exercise to further strengthen their resilience and ability to respond to severe operational and cyber scenarios. [9 Oct 2026]  #Cloud #Cyber

FCA: PRISM Taskforce outcomes report on open finance

The FCA has published the outcomes report of its Prioritisation and Real-world Insights Selection Matrix (PRISM) Taskforce, which developed a framework to assess the potential impact of open finance use cases. The report reflects the ideas explored through that process and the outcomes of the taskforce. Key findings include:

• Open finance impact relies on shared foundations. The common infrastructure, governance and operating model choices are just as important as the individual services when considering impact. Some foundations may need to be fixed across the ecosystem, while others should remain flexible as markets develop.
• Open finance provides foundations for AI and agentic finance. It enables trusted data access and shares the building blocks these technologies need to develop safely, including interoperability, governance and accountability.
• Data quality, provenance and trust are foundational. Open finance depends on accurate and timely data that is sufficiently complete and traceable to trusted sources. Weak foundations could reduce confidence and limit adoption.
• Incentives and sustainability matter. Firms, consumers and intermediaries need clear reasons to participate over time. Assessments should consider costs, liability, benefits and whether operating models are commercially sustainable.
• Adoption shapes impact. Technical feasibility alone does not guarantee benefits. Value depends on whether consumers and businesses see sufficient value to engage with services, and whether those services fit real customer journeys, operational processes and commercial models. [7 Oct 2026] #OpenFinance #AI

HM Treasury appoints six Joint Lead Managers for DIGIT pilot

HM Treasury has announced the appointment of six firms as Joint Lead Managers for the pilot issuance of the Digital Gilt Instrument (DIGIT), the UK’s first digitally native Government bond.

The DIGIT pilot, expected by Q1 2027, will explore the application of distributed ledger technology (DLT) across the full issuance and lifecycle of a Government bond. The pilot’s design features include DIGIT being digitally native, short-dated, issued on a platform operating within the Digital Securities Sandbox (DSS), delivering on-chain settlement and independent of the Government’s main debt management programme. [6 Oct 2026] #DLT #DIGIT

Europe

ESMA seeks evidence on use of tokenised collateral in central clearing

The European Securities and Markets Authority (ESMA) has published a call for evidence on the potential use of tokenised collateral by central counterparties (CCPs), as tokenisation moves from experimentation to real-world application in financial markets.

The call for evidence focuses on how tokenisation may affect the transfer, management, protection and use of collateral throughout its lifecycle, including in the event of a clearing member default. It examines different tokenisation models, including ‘digital twins’ of assets held in traditional infrastructures and assets issued directly on distributed ledger technology (DLT), as well as hybrid arrangements.

Responses are requested by 15 January 2027. ESMA will assess the feedback in Q1 2027 and will determine the most appropriate course of action, including any regulatory or supervisory convergence measures within its remit. [9 Oct 2026]  #Tokenisation #DLT

ESMA sets supervisory expectations on services related to unauthorised stablecoins

ESMA has published an opinion clarifying supervisory expectations of cryptoasset services involving asset-referenced tokens (ARTs) and e-money tokens (EMTs) – also known as stablecoins – that do not comply with the requirements of the Markets in Cryptoassets Regulation (MiCAR).

The opinion confirms that cryptoasset service providers (CASPs) authorised under MiCAR should cease providing services related to non-MiCAR-compliant stablecoins to EU clients, with the full scope of affected services covering the operation of trading platforms, exchange services, execution of orders, custody and administration, and portfolio management.

ESMA calls on national competent authorities (NCAs) to ensure that market participants do not maintain, introduce, or facilitate access for clients to non-MiCAR-compliant stablecoins, and that CASPs implement appropriate technical, contractual, and organisational controls preventing clients from acquiring or increasing exposures to such tokens. Where NCAs identify remaining pre-existing exposures, these must be remediated as soon as possible and no later than three months after publication of the opinion. [8 Oct 2026]  #MiCAR #Crypto #Stablecoin #DigitalAsset

AMLA identifies AML/CFT priorities for MiCAR review

The Anti-Money Laundering Authority (AMLA) has published its response to the European Commission’s (EC’s) targeted consultation on the review of MiCAR. Considering the framework from an anti-money laundering and countering the financing of terrorism (AML/CFT) perspective, AMLA identified targeted amendments and clarifications that could better address money laundering and terrorist financing (ML/TF) risks and promote consistent supervision across the EU.

AMLA's response focuses on five areas:

• bringing staking, lending and borrowing activities within the regulatory framework given their specific ML/TF risks;
• establishing a clear legal definition of decentralised finance (DeFi) arrangements and common criteria for identifying who exercises effective control;
• developing a consistent EU-wide approach to unauthorised stablecoins to remove legal uncertainty;
• reviewing whether certain ART issuers should be treated as obliged entities under the AML/CFT framework; and
• clarifying information requirements to support effective cross-border supervision of CASPs. [8 Oct 2026] #MiCAR #Crypto #DigitalAsset

ESRB: 63rd General Board meeting outcomes

The European Systemic Risk Board (ESRB) has published a summary of the outcomes of its 63rd General Board meeting. The General Board held that risks to financial stability in the EU have increased over the last quarter, notwithstanding the continued resilience of the EU economy and a banking system that remains strong, with high profitability and ample capital and liquidity buffers.

The General Board identified four key risk drivers: a global rise in government bond yields adding to fiscal pressure; growing concentration of risks associated with the financing of AI and the technology industry; advancements in frontier AI models intensifying cyber risk; and the risk that all these factors could interact and be exacerbated by geopolitical tensions. [8 Oct 2026]  #AI

Hong Kong

HKMA and BNM strengthen cooperation in fintech and digital asset innovation

The HKMA and Bank Negara Malaysia (BNM) held a high-level bilateral meeting in Hong Kong on 2 October 2026, during which they exchanged information and experiences and had a comprehensive discussion covering macroeconomic and financial development, emerging banking regulatory issues, fintech and payment transformation, and strategies for advancing capital market connectivity, local currency usage, and Islamic finance.

The two institutions agreed to strengthen collaboration in the a number of areas, including:

• Fintech and digital asset innovation, such as the promotion of compliant cross-border stablecoin use cases between Hong Kong and Malaysia, collaboration on tokenisation and digital money, and exploring opportunities for collaboration and knowledge sharing on data-driven applications to expand trade finance access for small to medium-sized enterprises in both economies; and
• Cross-border regulatory collaboration, including strengthening cross-border cyber resilience and anti-scam and anti-fraud efforts. [6 Oct 2026]  #DigitalAsset #Cyber #Fintech

Singapore

MAS sets out supervisory expectations on responsible AI adoption

The Monetary Authority of Singapore (MAS) has issued a set of guidelines on AI risk management aimed at supporting responsible AI adoption in Singapore’s financial sector. The guidelines set out supervisory expectations in respect of managing risks arising from AI use, while allowing firms to tailor their approaches according to their risk profiles, including the scale and nature of their AI use.

The guidelines will take effect on 7 October 2027. Firms may implement the guidelines in phases, meeting the expectations in Sections 3 and 4 from 7 October 2027 and those in Sections 5 and 6 by 7 October 2028. [7 Oct 2026]  #AI

Thailand

SECT issues final regulations for crypto ETFs to broaden investment opportunities

The Securities and Exchange Commission Thailand (SECT) has issued notifications governing the establishment of and regulatory framework for crypto exchange-traded funds (crypto ETFs) in Thailand. These include the delegation of digital asset investment management by asset management companies and the eligibility of digital asset custodians and other qualified digital asset business operators to act as mutual fund supervisors for crypto ETFs.

The notifications will take effect on 16 October 2026. [8 Oct 2026]  #Crypto #DigitalAsset

India

RBI speech: Preserving financial stability in an evolving world

The RBI has published a speech by its Governor Sanjay Malhotra at the Fifth Kautilya Economic Conclave. Mr Malhotra set out the RBI's approach to financial stability and its assessment of emerging global risks. He identified five major global financial stability risks: elevated global debt levels; stretched asset valuations, particularly in the AI sector; elevated leverage among non-bank financial intermediaries (NBFIs) and growing bank-NBFI interconnectedness; vulnerabilities in private credit markets; and cyber risks compounded by AI.

Mr Malhotra also identified five policy priorities: building systemic resilience; understanding new cross-border systemic risks; improving monitoring and data frameworks; ensuring system-wide resilience; and ensuring that financial innovation reinforces rather than undermines trust. [3 Oct 2026]  #AI #Cyber

US

FinCEN withdraws two proposed rules on CVC transactions and cryptocurrency mixing

The Financial Crimes Enforcement Network (FinCEN) has announced the withdrawal of two proposed rules that would have imposed regulatory requirements on financial institutions in relation to certain digital assets, specifically convertible virtual currencies (CVCs). The first would have imposed recordkeeping, verification and reporting requirements on financial institutions for transactions involving CVCs and unhosted wallets; the second would have designated CVC mixing as a class of transactions of primary money laundering concern, triggering a special measure under the Bank Secrecy Act.

FinCEN stated that it has considered the comments received in response to both proposals and is withdrawing them as part of the Trump Administration's deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit for purpose.  [Oct 5, 2026]  #Crypto #DigitalAsset

CFTC: Proposed regulatory framework for crypto transactions and markets

The CFTC has published an Advance Notice of Proposed Rulemaking (ANPRM) setting out its intentions to establish a comprehensive regulatory framework for retail commodity transactions involving cryptoassets (CTXs) under section 2(c)(2)(D) of the Commodity Exchange Act. The ANPRM solicits public comment on how to: prevent abusive practices in cryptoasset markets under a uniform national regime; provide market participants with cryptoasset-specific contextual information concerning compliance requirements and industry best practices; and codify through rulemaking a new subcategory of designated contract market registration, known as a crypto asset market, for CTXs.

The CFTC intends to use the feedback to inform potential future rulemaking with respect to section 2(c)(2)(D) and CTXs. Responses are requested within 60 of publication in the Federal Register.  [Oct 5, 2026]  #Crypto #DigitalAsset

SEC: Proposed new framework for crypto custody by investment advisers and funds

The SEC has proposed new rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 to provide a tailored framework for the custody of cryptoassets by registered investment advisers and regulated funds (registered investment companies and business development companies).

Elements of the proposal include: permitting cryptoassets to be held in self-custody under certain circumstances; allowing the use of state trust companies as custodians for client and regulated fund cryptoassets; and updating requirements relating to financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds.

A factsheet accompanies the proposal.

Feedback is requested within 60 of publication in the Federal Register.  [Oct 1, 2026]  #Crypto #DigitalAsset