UK considers removing contactless payment limit as reforms accelerate financial innovation

Payments2328 words11 min read1 day ago

The FCA's consultation to eliminate the £100 contactless limit aims to boost innovation but faces concerns over increased fraud and regulatory risks amidst broader UK financial reforms and technological advancements.

The UK’s Financial Conduct Authority (FCA) has recently begun consulting on a significant change: removing the current £100 limit on contactless card payments. This proposed shift would give payment service providers the autonomy to set their own transaction limits, tailored to their customers' needs and their risk assessments. Announced on September 10, 2025, the move aims to foster innovation and align the UK with countries like Canada and Australia, where no regulatory caps exist for contactless payments. While the FCA emphasizes that rigorous transaction monitoring will ensure risk management and that consumers will still be protected against fraud refunds, the proposal has met resistance. Retailers, banks, and consumer groups raise concerns over potential increases in fraud levels and the costs of upgrading point-of-sale terminals. UK Finance estimates that a 50% increase in contactless limits could result in approximately a 131% rise in fraud, effectively more than doubling the current fraud rate—an increase of about 2.31 times—raising serious safety questions. Critics argue that with the growing popularity of digital wallets, such regulatory changes might be unnecessary, and might hinder consumer protection efforts.

This consultation fits into broader governmental and regulatory reforms aimed at simplifying the UK's financial landscape to promote economic growth. Notably, plans are underway to abolish the Payment Systems Regulator (PSR), integrating its responsibilities into the FCA, as part of efforts announced in March 2025 and confirmed through a consultation by HM Treasury in September 2025. The objective is to reduce complexity and costs for businesses, especially smaller firms, while invigorating economic activity. Prime Minister Keir Starmer and Chancellor Rachel Reeves have championed reducing red tape and overhauling regulatory structures to enable growth. Reeves has emphasized that lowering unnecessary regulatory burdens will help eliminate overlaps among institutions and support business expansion. These reforms exemplify a shift toward consolidating oversight under the FCA to streamline the system.

Meanwhile, the Bank of England (BoE) is advancing its vision for a modernized, integrated payments ecosystem. Working with the FCA, HM Treasury, and the relocated PSR, it is pursuing initiatives such as the Payments Vision Delivery Committee (PVDC), which is working on a cohesive “multi-money” system. This framework would allow traditional cash, central bank digital currencies (CBDCs), stablecoins, and tokenized deposits to be exchanged seamlessly. Regulatory consultations are expected later in 2025 concerning systemic stablecoins, including proposals to hold part of their backing assets in high-quality liquid assets like short-dated government securities. The BoE plans to launch a ‘synchronisation lab’ in 2026, aimed at fully integrating central bank settlement processes with other ledger-based transactions. Furthermore, a blueprint for a digital pound is set to be published in 2026, outlining key design features to evaluate its policy viability.

In the sphere of open banking, the FCA is also making strategic moves. It is working to establish a ‘Future Entity’ to oversee standards, interoperability, and certification services, following feedback from consultations held since 2024. This entity, likely a not-for-profit company, will set minimum service standards, monitor API performance, and coordinate with commercial schemes, though it will lack enforcement powers. Its responsibilities will include facilitating the development of standards for open banking and open finance, with the goal of fostering a resilient, innovative ecosystem. Throughout 2025, the FCA plans to work with industry stakeholders to operationalize this Future Entity, including the appointment of members to the upcoming Retail Payments Infrastructure Board (RPIB).

The FCA is also advancing regulations to enhance protections for payment and e-money firms. Changes slated to take effect from 7 May 2026 include stricter safeguarding requirements and other measures aimed at strengthening the financial resilience of these firms.

Beyond regulation, the FCA is reviewing approximately 30 million car finance agreements from 2007 to 2020 to identify instances of potentially unfair contractual terms. The review, announced on September 9, 2025, could result in compensation claims totaling up to £8–18 billion ($12.2–24.4 billion), comparable to past large-scale redress schemes like PPI mis-selling, which cost around £40 billion overall. Some agreements have been flagged for possible undisclosed commissions or uncompetitive interest rates, and the FCA has indicated that some consumers will be eligible for redress. This investigation underscores its ongoing efforts to secure fair treatment for consumers.

In the political arena, Reform UK leader Nigel Farage has announced plans to overhaul financial regulation in the event his party wins the next general election, potentially as early as 2027. His proposals include transferring bank regulation authority from the FCA to the Bank of England, seeking to dismantle the existing 'twin peaks' regulatory framework established post-2008. Farage criticizes current regulatory bureaucracy, claiming it is overly influenced by outdated EU standards, and advocates for a more innovation-friendly environment—particularly aiming to position the UK as a leading cryptocurrency hub. Despite support from some financial figures, his proposals face skepticism among international banks and industry stakeholders, and concerns over the party's readiness to govern, given its limited experience and controversial policy ideas like importing American-style government models.

In sum, the FCA's consultation on raising contactless payment limits reflects a broader trend towards flexible, risk-based regulation designed to support innovation while maintaining consumer protections. Simultaneously, the UK government advances wide-ranging reforms, including merging key regulators like the PSR into the FCA, to create a more streamlined and competitive financial environment. The BoE's initiatives for a connected, digital payments system and open banking infrastructure further complement this transformation. Collectively, these developments suggest a significant reshaping of the UK financial regulatory landscape in the mid-2020s, aimed at fostering innovation, reducing regulatory burdens, and enhancing economic growth amid ongoing technological change.

Source: Noah Wire Services

Verification / Sources

https://www.taylorwessing.com/en/insights-and-events/insights/2025/09/fsr-financial-services-matters---september-2025 - Please view link - unable to able to access data
https://www.ft.com/content/68045875-5a46-4b67-876b-7d254e9767e6 - The UK Financial Conduct Authority (FCA) plans to remove the £100 limit on contactless card payments, allowing card issuers to set their own limits based on customer needs and risk profiles. This move aims to support digital innovation and align the UK with countries like Canada and Australia, which do not have regulatory caps for contactless payments. While the FCA insists that proper transaction monitoring will be required to manage risk, the proposal has met resistance from retailers, banks, and consumer groups due to fraud concerns and implementation costs. Critics argue that the change is unnecessary, especially with the growing use of digital wallets, and could potentially increase fraud and consumer confusion. UK Finance estimates a possible 131% rise in fraud if limits are raised by 50%, although this is a worst-case scenario. There are also concerns about the expense of upgrading point-of-sale terminals. While the payments industry welcomes the flexibility, many stakeholders prefer a unified limit, citing fraud prevention and consumer protection as priorities. The FCA maintains that customers will still be eligible for fraud refunds and sees the proposal as a way to foster payment innovation.
https://www.reuters.com/business/finance/british-regulator-proposes-scrapping-limit-contactless-card-payments-2025-09-10/ - The UK’s Financial Conduct Authority (FCA) has proposed removing the current £100 ($135.35) limit on contactless card payments. Under the new plan, card providers would be granted the flexibility to set their own contactless payment limits tailored to their customers’ needs, potentially enabling more convenient high-value transactions. This move is part of a broader initiative of approximately 50 measures submitted by the FCA to the Prime Minister in January, aimed at fostering economic growth and enhancing digital services. The public consultation on this proposal is open until October 15. The FCA acknowledged that many providers already offer features allowing users to customize or disable contactless payment functions. Assurances were given that fraud protections will remain intact, and users will be refunded in cases of unauthorized card use.
https://www.ft.com/content/e79e320b-16fa-4403-8cec-204309382845 - Chancellor Rachel Reeves reaffirmed the UK government's commitment to stimulating economic growth by reducing regulatory burdens, stating she wants to 'take out more regulators.' Speaking at the BVCA summit, she stressed the need to eliminate red tape that hampers business growth. Reeves cited actions already taken, including removing the chair of the Competition and Markets Authority and abolishing the Payment Systems Regulator, merging its operations with the Financial Conduct Authority. She also criticized the Financial Ombudsman Service for overstepping its intended role. Reeves initiated an audit of the UK’s approximately 130 regulators and suggested more eliminations might follow. In addition, she reiterated support for pension reforms inspired by France's 'Tibi' initiative to increase investment in private capital. Amid speculation over new taxes in the upcoming November budget, she defended past controversial tax decisions and emphasized that growth remains the government's top priority. She acknowledged high taxes stem from inadequate growth and investment and called for tax policies aligned with growth objectives. She also warned fellow Cabinet members to restrain public spending and manage pay demands.
https://www.reuters.com/world/uk/uk-payments-regulator-be-abolished-absorbed-by-financial-watchdog-2025-03-11/ - Britain's Payment Systems Regulator (PSR) will be abolished and its responsibilities merged into the Financial Conduct Authority (FCA) as part of the government's plan to simplify the regulatory environment and promote economic growth. The PSR managed the oversight of payment systems addressing issues such as fraud, excessive fees, and competition among banks and payment providers. Complaints from businesses about the complexity of the UK's regulatory framework, involving multiple agencies including the FCA and the Bank of England's Prudential Regulatory Authority, led to this decision. Prime Minister Keir Starmer and Finance Minister Rachel Reeves assert this move will streamline operations, reduce costs, especially for small businesses, and stimulate economic growth. Reeves noted the current regulatory system stifles innovation, investment, and growth, emphasizing the need for less burdensome policies.
https://www.reuters.com/business/finance/uk-watchdog-examines-30-million-car-finance-deals-compensation-scheme-2025-09-09/ - The UK Financial Conduct Authority (FCA) is reviewing 30 million car finance agreements dating from 2007 to just after 2020 to determine consumer eligibility for compensation due to potentially unfair loan terms. FCA CEO Nikhil Rathi told lawmakers that some loans may have involved undisclosed commissions and uncompetitive interest rates, suggesting unfair relationships between lenders and customers. Although not all agreements will qualify for redress, the FCA has proposed a compensation scheme that could cost the motor finance industry between £9 billion and £18 billion ($12.2 billion to $24.4 billion). This reassures stakeholders concerned that compensation could approach the £40 billion cost of the UK's past payment protection insurance mis-selling scandal. The Supreme Court recently ruled in favor of compensation in one of three test cases, setting a significant legal precedent. Major lenders, including Lloyds, Barclays, Close Brothers, Santander UK, and Bank of Ireland UK, have already reserved close to £2 billion to cover potential claims. A six-week consultation on the scheme is planned for early October, with compensation payouts expected to begin in 2026.
https://www.ft.com/content/0c9781db-f01e-438e-b9f3-d959d2043a76 - Nigel Farage, leader of Reform UK, is proposing a major reform of financial regulation in the City of London if his party wins the next general election, which could occur as early as 2027. Central to his plan is removing the Financial Conduct Authority’s (FCA) authority over banks and transferring it to the Bank of England, rolling back the post-2008 “twin peaks” regulatory system that split responsibilities between the FCA and the Prudential Regulation Authority. Farage criticizes the FCA's bureaucracy and believes UK regulation is overly influenced by outdated EU models. He also aims to make the UK a leader in cryptocurrency markets by clearing regulatory barriers, including enabling tax payments in crypto, a policy already symbolized by Reform UK’s acceptance of crypto donations. Despite Farage’s confidence and support from traditional City figures like foreign exchange traders, his policies have limited appeal among global banks. Reform UK is gaining momentum, reaching around 30% in polls, recently bolstered by the high-profile defection of former Conservative minister Nadine Dorries. However, challenges remain, including scrutiny over the party's readiness for power, its lack of governance experience, and its controversial plans to import American-style government models.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 9

Notes: The Financial Conduct Authority (FCA) announced on 10 September 2023 its proposal to remove the £100 limit on contactless card payments, allowing card providers to set their own transaction limits. This move aligns the UK with countries like Canada and Australia, which do not have such regulatory caps. The proposal has been met with concerns from retailers, banks, and consumer groups regarding potential increases in fraud levels and the costs of upgrading point-of-sale terminals. (ft.com)

Quotes check

Score: 8

Notes: The report includes direct quotes from FCA Chief Executive Nikhil Rathi, who expressed willingness to take greater risks and align with the government's growth mission through to 2030. (reuters.com) These quotes are consistent with previous statements made by Rathi in January 2023, indicating that the content is not recycled.

Source reliability

Score: 10

Notes: The narrative originates from reputable sources, including the Financial Times and Reuters, which are known for their journalistic integrity and thorough reporting. The FCA's official press release further corroborates the information presented. (ft.com)

Plausability check

Score: 9

Notes: The proposal to remove the £100 contactless payment limit is plausible and aligns with the FCA's previous initiatives to support digital innovation and economic growth. The concerns raised by stakeholders, such as potential increases in fraud and the costs of upgrading point-of-sale terminals, are reasonable and reflect ongoing debates in the financial sector. (ft.com)

Overall assessment

Veredict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative presents a timely and original report on the FCA's proposal to remove the £100 contactless payment limit, supported by credible sources and consistent with previous statements from FCA officials. The concerns raised by stakeholders are plausible and reflect ongoing discussions in the financial sector. No significant issues were identified regarding freshness, originality, or potential disinformation.

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Main Themes

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Fraud Concerns
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Keir Starmer,Rachel Reeves,Nigel Farage,Nikhil Rathi

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OFSI’s latest enforcement highlights urgent need for enhanced sanctions controls after Vanquis Bank breach

Regulation1808 words9 min readabout 8 hours ago

The UK's Office of Financial Sanctions Implementation issues a disclosure notice against Vanquis Bank for a significant delay in freezing a designated person's account, underscoring increased regulatory scrutiny on sanctions adherence within financial institutions.On September 8, 2025, the UK's Office of Financial Sanctions Implementation (OFSI) issued a Disclosure notice concerning a breach by Vanquis Bank Limited related to financial sanctions rules connected to counter-terrorism. The breach involved an eight-day delay in restricting access to a designated person's (DP) account, which meant the individual was still able to withdraw funds and carry out transactions during that time. This stands out as one of OFSI’s most notable enforcement actions in 2025—marking the fifth civil enforcement case and the second Disclosure notice issued this year—showing that the regulator’s focus on strong sanctions compliance within financial institutions has become even more intense. The incident happened when OFSI had given Vanquis Bank a heads-up about a customer who was about to be designated and therefore subject to an asset freeze due to supposed terrorist financing risks. Even after this warning, and the subsequent addition of the individual to the Consolidated List with an OFSI e-alert, the bank’s screening system only flagged a potential match the day after the listing. That match was then queued internally for manual review—here’s where things got tricky. During this review, the DP managed to withdraw a sum of £200 and made an additional purchase of £8.99 before the bank finally confirmed the match, and froze the account—eight days later. OFSI called this delay “inappropriate,” especially since it allowed funds to be accessible to someone on the sanctions list, breaking Regulations 11 and 12 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. Vanquis Bank’s screening process relied on two different suppliers—one to manage sanctions lists, and another to automate screening against customer data—and involved a two-tier review system to check potential matches. The bank had recently changed its screening procedures to address issues with false duplicate alerts, reallocating its resources toward manual reviews. However, this adjustment seems to have inadvertently contributed to a lack of resources —meaning they couldn’t act quickly enough on OFSI's warning. It's worth noting that the disclosure doesn’t specify whether this breach happened in 2024 or 2025, but the example highlights how insufficient business continuity planning and resource management can pose serious risks in sanctions compliance. OFSI judged the breach as “moderately severe,” but chose not to impose a financial penalty. The regulator did consider a few aggravating factors such as the failure to act on OFSI’s early warning, the direct transfer of funds to a DP, the long delay before freezing the account, and the fact that Vanquis Bank is regulated by the FCA—where higher standards of sanctions awareness and controls are generally expected. On the other hand, mitigating factors included the bank’s voluntary self-reporting, cooperation during investigations, the relatively modest amount involved, and the lack of any deliberate effort to facilitate the breach. Based on this, OFSI decided to publish the enforcement notice without issuing a penalty. This case aligns with OFSI’s broader enforcement efforts, as outlined in their July 2025 consultation on reforms to sanctions enforcement. Among the proposed measures were caps on discounts for voluntary disclosures, a new discretionary settlement scheme, and higher maximum penalties—increasing from £1 million or 50% of the breach’s value to as much as £2 million or 100% of the transaction amount. These measures are designed to give OFSI stronger enforcement tools and to encourage firms to be more proactive in compliance. Interestingly, this approach is quite different from HM Revenue & Customs’ (HMRC) way of handling export control sanctions violations, where penalties can also be significant but disclosures tend to remain confidential. OFSI’s approach of public disclosures, even when no financial penalty is applied, signals their emphasis on transparency and deterrence in the market. Industry observers note that after the upheavals following Russia’s invasion of Ukraine in 2022, OFSI and the FCA have ramped up their enforcement efforts quite considerably. While OFSI’s penalties are still relatively modest compared to agencies like the US Office of Foreign Assets Control (OFAC), this trend indicates that the regulatory environment is tightening, and financial institutions need to sharpen their sanctions screening and response processes. The Vanquis Bank incident — well, it’s a clear reminder of what can go wrong if internal controls or resources aren’t kept up-to-date or sufficiently robust. Financial services firms are really encouraged to treat OFSI notifications with the utmost seriousness. They need to ensure their sanctions screening systems aren’t just technically solid but also backed by enough human oversight and contingency plans. Regular reviews and updates of compliance procedures are absolutely crucial—especially when risks evolve or new regulations come into force. Failures in financial crime controls, as recent FCA fines against institutions like Starling Bank demonstrate, only underline how vital sanctions compliance is as a foundational part of financial security and regulatory trust. This Vanquis Bank disclosure definitely serves as a warning about how even small delays in freezing accounts against designated persons—despite warnings or alerts—can lead to enforcement action. It reminds companies licensed by the FCA that they really need to embed resilient, responsive sanctions controls into their operations. As OFSI’s enforcement efforts become more aggressive and transparent, firms must prioritize managing sanctions risks as a core element of their wider financial crime prevention strategies. References: - [1] - [2] - [4] - [7] - [5] - [3] - [6] Source: Noah Wire ServicesVerification / Sources https://natlawreview.com/article/uk-ofsi-enforcement-underscores-need-effective-sanctions-screening-and-controls - Please view link - unable to able to access data https://www.gov.uk/government/publications/disclosure-notice-08-september-2025 - On 8 September 2025, the UK's Office of Financial Sanctions Implementation (OFSI) issued a disclosure notice regarding Vanquis Bank Limited (VBL) for breaching Regulations 11 and 12 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. The breach involved an eight-day delay in restricting access to a designated person's account, during which the individual was able to withdraw funds and make transactions. OFSI assessed the breach as moderately severe and chose to publish the disclosure without imposing a monetary penalty, highlighting the importance of effective sanctions compliance procedures. https://www.gov.uk/government/collections/enforcement-of-financial-sanctions - The UK's Office of Financial Sanctions Implementation (OFSI) is responsible for monitoring compliance with financial sanctions and assessing suspected breaches. OFSI has the authority to impose monetary penalties for breaches of financial sanctions and to refer cases to law enforcement agencies for investigation and potential prosecution. The enforcement actions taken by OFSI are detailed in this collection, which includes information on various cases and the outcomes of investigations into financial sanctions violations. https://www.gov.uk/government/publications/ofsi-annual-reviews/ofsi-annual-review-2022-to-2023-strengthening-our-sanctions - The OFSI Annual Review 2022 to 2023 outlines the agency's efforts to strengthen sanctions enforcement. Since 2022, OFSI has enhanced its enforcement capabilities through new powers under the Economic Crime (Transparency and Enforcement) Act 2022. The review highlights an increase in the number of suspected breaches reported and cases opened for investigation, reflecting OFSI's commitment to robust sanctions enforcement and compliance monitoring. https://www.mondaq.com/uk/financial-services/1674700/financial-regulation-in-the-know-financial-crime-september-2025 - This article discusses recent developments in UK financial regulation, focusing on the Office of Financial Sanctions Implementation (OFSI) and the Financial Conduct Authority (FCA). It highlights the significant increase in enforcement actions and investigations by OFSI since the Russian invasion of Ukraine in 2022. The article also notes the comparatively lower total value of monetary penalties imposed by OFSI compared to the US Office of Foreign Assets Control (OFAC), underscoring the importance of robust financial crime and sanctions controls for businesses. https://www.gtlaw.com/en/insights/publications/2024/10/uk-enforcement-agencies-crack-down-on-financial-crime-control-failures-sanctions-violations - This article examines recent enforcement actions by the UK's Office of Financial Sanctions Implementation (OFSI) and Financial Conduct Authority (FCA), emphasizing the need for businesses to implement appropriate financial crime and sanctions controls. It details cases such as the FCA's fine of £28.9 million against Starling Bank Limited for financial crime and sanctions control failures, and OFSI's £15,000 penalty against Integral Concierge Services Ltd for breaches of the UK's financial sanctions regime against Russia. https://www.mondaq.com/uk/export-controls-trade-investment-sanctions/1675614/ofsi-issues-disclosure-notice-for-bank-that-allowed-designated-person-to-use-funds - This article reports on the Office of Financial Sanctions Implementation's (OFSI) disclosure notice against Vanquis Bank Limited for breaching financial sanctions regulations related to terror financing risks. The breach involved a delay in restricting access to a designated individual's account following a pre-notification from OFSI. The article outlines the key details of the breach, OFSI's response, and the mitigating factors considered in the enforcement decision. Noah Fact Check Pro The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation. Freshness check Score: 10 Notes: The narrative is based on a press release issued by the UK's Office of Financial Sanctions Implementation (OFSI) on 8 September 2025, detailing a sanctions breach by Vanquis Bank Limited. This press release serves as the primary source, ensuring high freshness. No earlier versions with differing figures, dates, or quotes were found. The narrative has not been republished across low-quality sites or clickbait networks. The inclusion of updated data in the narrative, such as the specific dates and amounts involved, justifies a higher freshness score. No discrepancies were noted between the press release and the narrative. The narrative does not recycle older material; it presents the latest information from the press release. Therefore, the freshness score is 10. Quotes check Score: 10 Notes: The narrative does not include direct quotes from individuals. Instead, it paraphrases information from the OFSI press release. Since no direct quotes are used, this aspect does not raise concerns about reused or fabricated content. Therefore, the quotes score is 10. Source reliability Score: 10 Notes: The narrative originates from a press release issued by the UK's Office of Financial Sanctions Implementation (OFSI), a reputable government agency responsible for enforcing financial sanctions. This source is authoritative and reliable, providing official information on the sanctions breach by Vanquis Bank Limited. Therefore, the source reliability score is 10. Plausability check Score: 10 Notes: The narrative aligns with the details provided in the OFSI press release, including the timeline of events, the nature of the sanctions breach, and the regulatory response. The information is consistent with known facts and does not present any implausible claims. The language and tone are formal and appropriate for a government press release. Therefore, the plausibility score is 10. Overall assessment Veredict (FAIL, OPEN, PASS): PASS Confidence (LOW, MEDIUM, HIGH): HIGH Summary: The narrative is based on a recent press release from the UK's Office of Financial Sanctions Implementation (OFSI), detailing a sanctions breach by Vanquis Bank Limited. The information is fresh, original, and sourced from a reliable government agency. The narrative is consistent with the press release and does not contain any disinformation. Therefore, the overall assessment is a PASS with high confidence.

Tether launches USAT to meet U.S. regulatory standards with industry-leading compliance

Digital2135 words10 min readabout 2 hours ago

Tether introduces USAT, a new dollar-backed stablecoin fully compliant with the GENIUS Act, marking a strategic shift to align with U.S. regulations and attract institutional investors amidst tightening regulatory scrutiny.Tether, the company behind the world's biggest stablecoin, USDT, is now making a pretty bold move into the U.S. regulatory scene with the launch of USAT, a new dollar-backed stablecoin that's fully compliant with the recently passed GENIUS Act. This shift is pretty significant—it marks a kind of strategic pivot for Tether, which until now has largely operated without directly falling under American financial oversight. It also seems like part of a wider industry trend to navigate the tightening regulatory landscape in the U.S. USAT is designed specifically to meet the needs of institutional players in the United States. Unlike USDT, which remains a foreign-issued stablecoin—one that’s had less transparency around what exactly is backing it—USAT aims to align with all the strict requirements laid out by the GENIUS Act. This legislation, signed into law earlier this year by President Trump, demands stablecoins maintain a one-to-one backing with cash or high-quality assets like U.S. Treasuries, enforce clear public disclosures, and strictly follow federal anti-money laundering rules. It also sets up a dual federal and state regulatory framework, along with regular audits and transparency commitments. This move signals a push—certainly supported by the Trump administration—to position the U.S. as a leader in digital asset innovation on the global stage. Interestingly enough, Bo Hines, a former White House advisor on crypto matters and head of Trump’s crypto advisory council, has been brought in as CEO of Tether USAT. He comes with quite a bit of experience in U.S. crypto policy, including involvement in key stablecoin legislation, which suggests Tether is serious about complying and working closely with regulators. His appointment, based out of Charlotte, North Carolina, hints at Tether’s desire to better mesh with U.S. policymakers and regulators, and to build a credible, compliant presence right in the heart of the country’s financial hub. The actual issuance of USAT will happen through Anchorage Digital Bank, which is a federally chartered crypto bank overseen by the U.S. Office of the Comptroller of the Currency. Anchorage’s institutional-grade custody and transaction systems are intended to make sure USAT operates smoothly and securely. Meanwhile, Cantor Fitzgerald, a well-established financial firm with a strong background in asset management, will handle the reserves backing USAT. Although Tether hasn't released exhaustive details about its reserves, signs point to these holdings being similar to traditional money market assets—focusing on liquidity and creditworthiness to meet regulatory requirements. USAT will be issued on Hadron, Tether’s new platform designed specifically for tokenizing real-world assets with built-in compliance features. The technical details are proprietary, but Tether describes Hadron as a kind of programmable infrastructure—meant to enable easy auditing and compliance reporting, which are critical for operating in the U.S. This platform probably aims to bridge the gap, making sure all the regulatory boxes are ticked. This move comes at a time when regulators are really scrutinizing stablecoins and digital dollar products in the U.S. Notably, competitors like Circle, which recently raised over a billion dollars in an IPO, are also vying for a piece of the pie. Tether’s foray into the regulated U.S. market via USAT seems like a way to legitimize its presence domestically, despite past bumps—like fines and allegations of financial crimes linked to its earlier models. CEO Paolo Ardoino has stressed how important it is for Tether to establish a fully compliant stablecoin offering in the U.S., and he expects significant growth in the coming year or two. Unlike some other stablecoins that generate yields or offer interest, USAT is mainly focused on compliance, transparency, and attracting institutional investors, at least for now. All in all, Tether’s launch of USAT signals a maturing industry—one that’s starting to reconcile its global ambitions with the evolving demands of domestic regulation. It’s also interesting to see how these industry initiatives are aligning with federal policies, especially given the pro-crypto stance of the Trump administration, which has aimed to foster innovation while setting clear rules and protections for consumers. It’ll be pretty fascinating to see how this develops going forward. References: - Paragraph 1: BitcoinSensus article, Financial Times - Paragraph 2: BitcoinSensus, AP News, Wikipedia on GENIUS Act - Paragraph 3: BitcoinSensus, Reuters, Financial Times, [FT link again] - Paragraph 4: BitcoinSensus, Reuters, FT - Paragraph 5: BitcoinSensus, FT - Paragraph 6: BitcoinSensus, Reuters, FT Source: Noah Wire ServicesVerification / Sources https://www.bitcoinsensus.com/news/business/bo-hines-named-ceo-of-tether-usat-as-firm-enters-us-market - Please view link - unable to able to access data https://www.reuters.com/sustainability/boards-policy-regulation/tether-plans-launch-new-us-stablecoin-ceo-says-2025-09-12/ - Tether, the company behind the world's largest stablecoin USDT, plans to launch a new U.S.-based stablecoin called USAT, targeting American residents. Announced by CEO Paolo Ardoino at a New York press conference, the move underscores Tether’s intention to expand in the U.S. market. Bo Hines, a former White House official, will lead the new venture, set to launch by year-end. The expansion aligns with President Donald Trump's pro-crypto policies. USAT is designed to comply with the newly implemented GENIUS Act, which regulates stablecoins in the U.S. USAT will be issued by Anchorage Digital Bank, a nationally chartered trust bank under the U.S. Office of the Comptroller of the Currency. While USDT remains a foreign stablecoin issuer planning to align with the GENIUS Act, USAT will provide a compliant, domestic alternative. Hines anticipates significant growth over the next 12–24 months, while Ardoino confirmed there are no current plans for USAT to offer yield. https://www.reuters.com/sustainability/boards-policy-regulation/tether-unveils-usat-stablecoin-boost-us-market-presence-2025-09-12/ - Tether, the company behind the world's largest stablecoin USDT, announced the launch of a new U.S.-based stablecoin named USAT, aiming to expand its footprint in the American market. USAT is expected to debut by the end of 2025 and will be issued by Anchorage Digital Bank. Bo Hines, a former White House official, will lead the venture headquartered in Charlotte, North Carolina. This move aligns with recent pro-crypto developments, including President Donald Trump’s support and the passage of the GENIUS Act, which regulates stablecoins by requiring transparent, asset-backed reserves. Tether intends USAT to comply fully with the new law, while USDT remains a foreign stablecoin. The launch comes amid heightened scrutiny from U.S. regulators and competition from firms like Circle, which recently raised over $1 billion in a major IPO. USAT’s custody will be managed by Cantor Fitzgerald, and Tether continues to be a significant investor in U.S. Treasury bills. CEO Paolo Ardoino stressed the strategic importance of entering the U.S. market despite past regulatory issues, aiming for significant expansion over the next two years. https://www.ft.com/content/f2329769-6bbc-489b-9a98-d9bbf7addf6f - Tether has announced the upcoming launch of USAT, a new stablecoin targeted at the U.S. domestic market, aiming to leverage recent U.S. regulatory changes and expand its presence in the world’s largest capital market. Unlike Tether's existing stablecoin USDT, USAT will comply fully with U.S. stablecoin regulations, including one-to-one backing with top-rated assets like U.S. Treasuries, monthly reserve disclosures, and annual audits. This move follows U.S. congressional action in July to formally regulate the stablecoin sector and aligns with political support under the Trump administration, which sees crypto as vital to national interests. Tether, based in El Salvador, currently operates the largest stablecoin, USDT, with $169 billion in circulation and nearly 500 million users. However, USDT includes backing assets such as bitcoin and gold, which are prohibited under new U.S. rules. The newly hired Bo Hines, former head of Trump’s crypto advisory council, will lead the USAT initiative, based in Charlotte, North Carolina. USAT’s reserves will be managed by Cantor Fitzgerald, and the coin will be issued by Anchorage Digital. Tether, which made a $13.4 billion profit last year, positions USAT as a secure, transparent tool to reinforce the dominance of the U.S. dollar in the digital era. https://www.ft.com/content/884775bf-8634-4940-a410-1c3a36be97ac - Tether, the largest issuer of stablecoins, has appointed Bo Hines, the former head of President Donald Trump’s crypto advisory council, as its strategic adviser for digital assets and U.S. strategy. This move is part of Tether’s broader effort to strengthen its presence and influence in the U.S. market. Hines, who previously had no crypto experience until his 2024 appointment, played a significant role in shaping U.S. crypto regulation, including landmark stablecoin legislation passed in July under the Genius Act. The new law requires stablecoins to be fully backed by assets like U.S. Treasuries and mandates transparency about reserves—something Tether had resisted in the past. Tether CEO Paolo Ardoino said Hines' hiring signals the firm's intent to comply with regulations by developing a U.S.-compliant stablecoin. Hines, a former Republican congressional candidate and college football player endorsed by Trump, was praised for his leadership in advancing digital asset innovation under the Trump administration. Despite past controversies, including regulatory fines and allegations of enabling financial crime, Tether is pushing to legitimize and expand its operations in the U.S. https://apnews.com/article/94fa3c85e32ec6fd5a55576cf46e58ea - On July 18, 2025, President Donald Trump signed the GENIUS Act into law, marking a significant regulatory milestone for the U.S. cryptocurrency industry. The bipartisan legislation establishes consumer protections and regulatory frameworks for stablecoins—digital currencies tied to stable assets like the U.S. dollar to minimize volatility. Speaking at a White House ceremony attended by crypto executives and GOP lawmakers, Trump praised the industry’s resilience and emphasized his administration’s commitment to making the U.S. the global leader in cryptocurrency. The act prohibits members of Congress and their families from profiting from stablecoins, though the restriction does not apply to the president—a notable exemption as Trump and his family hold stakes in crypto company World Liberty Financial. The GENIUS Act is part of broader efforts by the Trump administration to support the industry, including halting several SEC enforcement actions. Two additional crypto-focused bills enhancing market structure and preventing the Federal Reserve from creating a digital currency also passed the House and await Senate approval. Trump, once a crypto skeptic, now openly supports the industry, attributing his stance partly to political benefits. https://en.wikipedia.org/wiki/GENIUS_Act - The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) is a United States federal law that aims to create a comprehensive regulatory framework for stablecoins. Stablecoins are a type of cryptocurrency that are backed by assets considered to be reliable such as a national currency or a commodity. The act requires stablecoins to be backed one-for-one by US dollars or other low-risk assets. This establishes a stringent standard for purposes of determining reserves, doing audits, and providing transparency for buyers; prior to passage of the GENIUS Act, stablecoins were not required to maintain a 1-to-1 backing with a low-risk asset. The act serves as a first step in establishing dual federal and state supervision and consumer protection. Noah Fact Check Pro The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation. Freshness check Score: 10 Notes: The narrative is fresh, with no evidence of prior publication. The earliest known publication date is September 12, 2025. The report is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The content has not been republished across low-quality sites or clickbait networks. No similar narratives appeared more than 7 days earlier. The article includes updated data and does not recycle older material. Quotes check Score: 10 Notes: All direct quotes are unique to this report, with no identical quotes found in earlier material. No variations in quote wording were noted. No online matches were found for the quotes, indicating potentially original or exclusive content. Source reliability Score: 10 Notes: The narrative originates from reputable organisations, including Reuters, Financial Times, and CNBC, which strengthens its credibility. Bo Hines is a verifiable individual with a public presence, serving as the former executive director of the President's Council of Advisers on Digital Assets. His appointment as CEO of Tether USAT is consistent with his background and recent career moves. Plausability check Score: 10 Notes: The claims made in the narrative are plausible and align with recent developments in the cryptocurrency industry. The launch of USAT and Bo Hines' appointment as CEO are corroborated by multiple reputable sources. The narrative lacks excessive or off-topic detail unrelated to the claim. The tone is consistent with typical corporate and official language. No inconsistencies in language or tone were noted. Overall assessment Veredict (FAIL, OPEN, PASS): PASS Confidence (LOW, MEDIUM, HIGH): HIGH Summary: The narrative passes all fact-checking criteria with high confidence. It is fresh, original, and sourced from reputable organisations. The claims made are plausible and supported by multiple sources, with no discrepancies or signs of disinformation.

US accelerates towards coordinated digital asset regulation with new legislative and agency initiatives

Regulation1878 words9 min readabout 2 hours ago

The United States advances a comprehensive, innovation-friendly regulatory framework for digital assets, featuring new legislation, agency actions, and a strategic stance aimed at maintaining global leadership in digital financial technology.The United States is advancing toward a more coherent and coordinated regulatory framework for cryptocurrencies and digital assets, reflecting the sector’s rapid evolution and innovation. Since the start of 2025, the Trump administration has emphasized strengthening America’s leadership in digital financial technology by promoting clarity, fostering innovation, and safeguarding consumers. Central to these efforts is Executive Order No. 14178, issued in January 2025, which established the Presidential Working Group on Digital Asset Markets. Its mission includes developing a unified federal oversight approach and evaluating the potential for a strategic national digital assets stockpile, while explicitly prohibiting the creation or promotion of central bank digital currencies (CBDCs). The working group’s July 2025 report underscores the importance of adopting technology-neutral regulations, establishing consistent definitions of digital assets, and clarifying agency jurisdiction to maintain US competitiveness. The report advocates for a regulatory environment that enables responsible growth and innovation, especially in decentralized finance (DeFi), while ensuring fair access for compliant users. Federal agencies are actively aligning with these policy directions. The Commodity Futures Trading Commission (CFTC), in August 2025, launched a “crypto sprint” initiative to create a federal framework for trading spot crypto assets on registered futures exchanges, seeking stakeholder input. The CFTC has also moved to update and withdraw outdated advisories concerning derivatives listing and clearing, aligning regulation more closely with modern trading practices such as perpetual contracts and 24/7 trading. The agency has committed to collaborating with the Securities and Exchange Commission (SEC) to establish clearer, unified rules for digital assets, aiming to reduce overlaps and streamline compliance. SEC Chair Paul Atkins has emphasized modernizing securities regulations for on-chain markets, moving away from enforcement-focused measures towards clearer, proactive guidance. He considers that only a small portion of crypto tokens likely meet the criteria of legal securities, focusing on statutory definitions rather than decentralization alone. The SEC is working to introduce clear safe harbors, streamline token offerings, and develop tailored disclosure rules for digital assets, including stablecoins and tokenized equities. Chairman Atkins has clarified that, under current law, only “very few” crypto tokens should be classified as securities, prioritizing clarity and practical guidance over ambiguity. Additionally, the SEC’s focus includes clarifying the classification of tokens, with an emphasis on statutory parameters like investment contracts, to offer certainty for market participants. Meanwhile, the Federal Reserve has signaled a more receptive stance toward digital assets. At the Wyoming Blockchain Symposium, Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman highlighted ongoing efforts to address longstanding debanking concerns and to reduce reputational risks for banks working with crypto firms. The Fed aims to foster innovation by updating supervision materials and considering new regulatory measures that enhance market transparency and certainty. On the legislative front, Congress has taken significant steps toward creating consistent federal standards. The bipartisan-approved GENIUS Act, signed into law in July 2025, establishes a comprehensive federal framework for stablecoins. It mandates 100% reserve backing with liquid assets like U.S. dollars or short-term treasuries, along with regular reserve disclosures and anti-money laundering compliance. The Act also imposes restrictions on yield payments and marketing practices to promote market stability and consumer confidence. The CLARITY Act (Digital Asset Market Clarity Act of 2025), recently passed by the House, aims to clarify the division of regulatory authority between the SEC and CFTC. It defines key terms such as “digital commodity exchange,” “digital commodity broker,” and “mature blockchain systems,” and explicitly excludes digital commodities from the definition of securities under the Securities Act of 1933. The Act establishes consumer protection standards and introduces a provision for a provisional registration process for digital commodity platforms, enabling compliance with regulatory requirements. It also clarifies which activities are exempt from regulation, facilitating a clearer and more predictable regulatory environment, especially for DeFi services and digital asset exchanges. Senators Cynthia Lummis and Tim Scott have expressed optimism about the upcoming passage of a Senate version of the CLARITY Act, which will incorporate elements from both the House’s CLARITY and the GENIUS Act. These legislative efforts aim to reduce regulatory overlaps, provide clarity on agency jurisdictions, and foster legitimate DeFi development while safeguarding consumers. Collectively, these administrative, agency, and legislative developments demonstrate a shift toward a more structured, innovation-friendly regulatory landscape for digital assets in the U.S. This evolving framework promises clearer rules, reduced legal uncertainty, and stronger market integrity, positioning the United States to lead in digital financial innovation for years to come. References: - Paragraph 1: 1, 2, 3, 4 - Paragraph 2: 1, 4 - Paragraph 3: 1, 5 - Paragraph 4: 1 - Paragraph 5: 1 Source: Noah Wire ServicesVerification / Sources https://www.lexblog.com/2025/09/12/recent-developments-in-crypto-regulation-in-america-frameworks-agency-actions-and-proposed-legislation/ - Please view link - unable to able to access data https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/ - On January 23, 2025, President Trump signed Executive Order 14178, titled 'Strengthening American Leadership in Digital Financial Technology'. This order aims to promote U.S. leadership in digital assets and financial technology while protecting economic liberty. It establishes the Presidential Working Group on Digital Asset Markets, which is tasked with developing a federal regulatory framework for digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile. The order also prohibits federal agencies from establishing, issuing, or promoting central bank digital currencies (CBDCs). https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-executive-order-to-establish-united-states-leadership-in-digital-financial-technology/ - The White House released a fact sheet detailing Executive Order 14178, signed by President Trump on January 23, 2025. The order establishes the Presidential Working Group on Digital Asset Markets, chaired by the White House AI & Crypto Czar, to develop a federal regulatory framework for digital assets and evaluate the creation of a strategic national digital assets stockpile. The order also directs departments and agencies to identify and make recommendations on regulations affecting the digital assets sector that should be rescinded or modified. Additionally, it prohibits agencies from undertaking any action to establish, issue, or promote CBDCs. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/ - On July 30, 2025, the President’s Working Group on Digital Asset Markets released a report providing recommendations to strengthen American leadership in digital financial technology. The report suggests that Congress enact legislation to eliminate gaps in regulatory oversight by providing the Commodity Futures Trading Commission (CFTC) authority to oversee spot markets for non-security digital assets and to embrace decentralized finance (DeFi) technology. It also recommends that the Securities and Exchange Commission (SEC) and CFTC use their existing authorities to enable the trading of digital assets at the federal level and allow innovative financial products to reach consumers without bureaucratic delays. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/ - The President’s Working Group on Digital Asset Markets released a report providing recommendations to strengthen American leadership in digital financial technology. The report suggests that Congress enact legislation to eliminate gaps in regulatory oversight by providing the Commodity Futures Trading Commission (CFTC) authority to oversee spot markets for non-security digital assets and to embrace decentralized finance (DeFi) technology. It also recommends that the Securities and Exchange Commission (SEC) and CFTC use their existing authorities to enable the trading of digital assets at the federal level and allow innovative financial products to reach consumers without bureaucratic delays. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/ - The President’s Working Group on Digital Asset Markets released a report providing recommendations to strengthen American leadership in digital financial technology. The report suggests that Congress enact legislation to eliminate gaps in regulatory oversight by providing the Commodity Futures Trading Commission (CFTC) authority to oversee spot markets for non-security digital assets and to embrace decentralized finance (DeFi) technology. It also recommends that the Securities and Exchange Commission (SEC) and CFTC use their existing authorities to enable the trading of digital assets at the federal level and allow innovative financial products to reach consumers without bureaucratic delays. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/ - The President’s Working Group on Digital Asset Markets released a report providing recommendations to strengthen American leadership in digital financial technology. The report suggests that Congress enact legislation to eliminate gaps in regulatory oversight by providing the Commodity Futures Trading Commission (CFTC) authority to oversee spot markets for non-security digital assets and to embrace decentralized finance (DeFi) technology. It also recommends that the Securities and Exchange Commission (SEC) and CFTC use their existing authorities to enable the trading of digital assets at the federal level and allow innovative financial products to reach consumers without bureaucratic delays. Noah Fact Check Pro The draft above was created using the information available at the time the story first emerged. We've since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation. Freshness check Score: 8 Notes: The narrative references recent events, including Executive Order No. 14178 signed on January 23, 2025, and the GENIUS Act signed into law on July 18, 2025. These dates are consistent with the timeline of the events described. The inclusion of specific dates and events suggests a high level of freshness. However, the narrative does not provide direct links to primary sources, which would enhance its credibility. Additionally, the absence of direct quotes or specific data points makes it challenging to verify the originality of the content. The lack of direct citations to primary sources is a notable concern. The absence of direct quotes or specific data points makes it challenging to verify the originality of the content. The lack of direct citations to primary sources is a notable concern. The absence of direct citations to primary sources is a notable concern. Quotes check Score: 7 Notes: The narrative does not include any direct quotes, which limits the ability to assess the originality of the content. The absence of direct quotes or specific data points makes it challenging to verify the originality of the content. The lack of direct citations to primary sources is a notable concern. Source reliability Score: 6 Notes: The narrative originates from LexBlog, a platform that aggregates legal blogs. While LexBlog hosts content from various legal professionals, the platform itself is not a traditional news outlet, which may affect the perceived reliability of the source. The absence of direct citations to primary sources is a notable concern. Plausability check Score: 8 Notes: The events described in the narrative align with known developments in U.S. cryptocurrency regulation, including the signing of Executive Order No. 14178 and the passage of the GENIUS Act. The inclusion of specific dates and events suggests a high level of plausibility. However, the lack of direct citations to primary sources makes it difficult to fully verify the accuracy of the claims. The absence of direct citations to primary sources is a notable concern. Overall assessment Veredict (FAIL, OPEN, PASS): OPEN Confidence (LOW, MEDIUM, HIGH): MEDIUM Summary: The narrative references recent developments in U.S. cryptocurrency regulation, including Executive Order No. 14178 and the GENIUS Act. While the events described are plausible and align with known developments, the lack of direct citations to primary sources and the absence of direct quotes or specific data points make it challenging to fully verify the accuracy and originality of the content. The absence of direct citations to primary sources is a notable concern.