Fintech, digital assets, payments and consumer credit | UK Regulatory Outlook May 2026

Payments  

HMT sets out new payments package during Fintech Week 

On 21 April 2026, the government announced a package of measures to modernise UK payments regulation. This includes: 

• Improving the regulation of payment services and electronic money by integrating it with the UK’s core regulatory approach for financial services. This will mean establishing a single, coherent framework for both traditional and tokenised payments, including stablecoins and tokenised deposits. 
• Regulating stablecoins for their use in payments, where these stablecoins have been issued under the forthcoming new regulated activity for stablecoin issuance in the UK. 
• Exploring how the regulation of payments services should adapt to payments conducted by AI agents. 
• Providing the FCA with new powers to regulate the future of Open Banking. 
• Bringing forward legislation to cut administrative burdens for companies wanting to provide stablecoin payments. 
• The appointment of Chris Woolard as the government’s new Wholesale Digital Markets Champion, leading work on building a tokenised wholesale financial markets system. 

City minister Lucy Rigby attended events during Fintech Week 2026 to promote the government’s efforts in maintaining the UK as a leading destination for fintechs, ahead of a forthcoming government consultation on how to reform the regulation of payment services and electronic money.  

New payments safeguarding rules and updated FCA approach document 

On 7 May 2026, changes to the safeguarding regime for payments and e-money firms came into force, completing a nine-month implementation period following a policy statement last summer setting out details of the rule changes (PS25/12). The Financial Conduct Authority (FCA) published an updated version of its approach document for payments and e-money, reflecting the enhanced regime.  

Please see Osborne Clarke's Insight for more information.  

FCA publishes roadmap on delivering open finance 

On 14 April 2026, the FCA published a roadmap extending to 2030, which sets out its plan to deliver open finance by extending secure data sharing beyond open banking across a wider range of products and services. It will prioritise high-impact use cases, initially focusing on improving SMEs' access to lending and consumers' access to mortgages. The regulator is working with industry to address key barriers, including consumer privacy concerns, the lack of incentive structures for firm participation, and fragmented regulatory oversight. 

Key anticipated milestones include: 

• Q4 2026: discussion paper on a regulatory framework for the first open finance scheme. 
• H1 2027: discussion paper on a long-term regulatory framework. 
• H2 2027: work with HMT on long-term regulatory framework options. 
• 2028-2030: scaling up and launching multiple open finance schemes with industry. 

Consumer finance  

FCA statement on legal challenges to motor finance compensation scheme 

The FCA has received four legal challenges to its motor finance compensation scheme, which it intends to defend robustly. It is unclear when the case will be heard, but it is unlikely to be before October. 

On 8 May 2026, the FCA published further advice for firms and consumers. The regulator is engaging with the tribunal and the challengers on the possibility of suspending some elements of the scheme while retaining those relating to preparatory work. For now, firms should continue preparing unless told otherwise. The FCA points to work that can be done now and is likely to be needed whatever the outcome of the challenges, such as identifying relevant complaints and agreements.  

Further updates will follow as the tribunal timing becomes clearer. As a contingency, lenders should be preparing to handle complaints from mid-November 2026.  

Digital assets 

FCA consults on perimeter guidance for cryptoasset activities 

On 15 April 2026, the FCA published a consultation paper (CP26/13) proposing amendments to the Perimeter Guidance manual (PERG) to clarify the scope of the new regulated cryptoasset activities and when permission is needed to carry on those activities. The consultation closes on 3 June 2026. 

The proposed guidance aims to provide clarity for firms transitioning from the current cryptoasset regime (under the Money Laundering Regulations 2017) to carrying on the new cryptoasset regulated activities under the Financial Services and Markets Act 2000, and help them plan and prepare for authorisation. 

The guidance will cover whether an activity is within the perimeter, together with the new specified investments and new regulated cryptoasset activities, including which permissions may be required for certain business models and how relevant exclusions operate.  

The FCA will publish its final guidance in September 2026. 

HMT publishes policy note and draft SI on amendments to Cryptoassets Regulations 

On 21 April 2026, HMT published a policy note and draft statutory instrument proposing amendments to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The amendments aim to provide greater certainty for firms wishing to provide stablecoin payment services, remove barriers to certain use cases, and ensure an internationally competitive UK regime.  

Key measures include: 

• Carving UK qualifying stablecoin (UKQS) out of the new dealing activities to avoid undue barriers for firms seeking to provide UKQS payment services ahead of planned payment services reforms. 
• Retaining lending and borrowing activities involving UKQS within scope of the cryptoassets dealing activities to address associated consumer risks. 
• Maintaining the requirement for firms undertaking UKQS payments to obtain cryptoassets safeguarding permissions where they safeguard cryptoassets on a customer's behalf, with plans to consult on moving this into the payments regime. 
• Making consequential changes, including amending the financial promotions regime perimeter and early activation of provisions carving out stablecoin backing assets from collective investment scheme and alternative investment fund classifications. 
• Making additional changes relating to proprietary trading, market making, and central securities depositories. 

Feedback on the draft SI is due by 22 May 2026. 

FCA sets out information for firms preparing for cryptoasset authorisation 

On 30 April 2026, the FCA published a new webpage setting out information for firms planning to apply for authorisation or variation of permission under the new cryptoassets regulatory regime, ahead of the application window opening on 30 September 2026. 

The FCA expects firms to be preparing now, developing "clear and credible" plans that show they have considered the new regime's requirements and how they will be ready. 

Firms registered under anti-money laundering rules should begin assessing what they need to change to meet the FCA's expectations, including in areas such as market conduct, customer treatment, and senior leadership. Authorised firms should consider how the new cryptoasset activities and requirements affect their current permissions, business model, governance, and systems and controls. 

Firms are encouraged to apply as soon as possible once the application window opens. 

In a related press release, the FCA announced that firms can request a pre-application meeting, to take place from July 2026.