Payments Weekly · 2026-W44Weekly
PAY.NEWS
Regulatory Reshaping and Accelerated Tokenization in Payments
From October 26, 2026, to November 1, 2026, payment industry regulation and infrastructure continued to evolve. The U.S. Court of Appeals for the Eighth Circuit vacated the 21-cent debit card interchange fee cap, and the Federal Reserve may rewrite the relevant rules. Canada advanced stablecoin reserve, registration, and return restrictions, while the OCC encouraged community banks to apply for payment stablecoin issuance licenses. Ripple received approval to operate a national trust bank, Hong Kong allowed round-the-clock trading of tokenized public funds, and DTCC launched a securities tokenization service. Meanwhile, Europe set a 2027 transition to T+1 settlement, and AI agent payments, cross-border QR-code payments, and stablecoin settlement continued to expand, although liability allocation, cybersecurity, and crypto asset enforcement remain challenging.
Reconsideration of Debit Card Fee Rules
Section overviewThe U.S. Court of Appeals for the Eighth Circuit vacated the Federal Reserve’s 21-cent cap on debit card interchange fees, holding that fee calculations should not include fixed costs unrelated to individual transactions. The ruling requires Regulation II to be reconsidered. The Federal Reserve may still appeal to the Supreme Court, and issuers with assets below $10 billion are outside the scope of the cap.
Payments Dive10.27U.S. Court of Appeals for the Eighth Circuit Vacates the Federal Reserve’s 21-Cent Debit Card Interchange Fee Cap
The U.S. Court of Appeals for the Eighth Circuit ruled that the Federal Reserve should not include fixed costs unrelated to individual transactions when setting the cap on debit card interchange fees, and vacated the current 21-cent fee cap. The current rules also include 0.05% of the transaction amount and a 1-cent fraud-prevention adjustment, applying to banks and financial institutions with deposit sizes of USD 10 billion or more; the Federal Reserve’s 2023 proposal to reduce the base rate to 14.4 cents has not progressed.
Digital Transactions News10.27U.S. Federal Appeals Court Overturns Debit Card Interchange Fee Cap; Fed May Rewrite Regulation II
The U.S. Court of Appeals for the Eighth Circuit overturned the 21-cent debit card interchange fee cap set by the Fed in 2011, requiring a reconsideration of Regulation II, which implements the Durbin Amendment. The Fed may still appeal to the U.S. Supreme Court. The cap does not apply to issuers with assets below $10 billion. Industry observers expect that, if the ruling stands, banks with larger debit card businesses will come under pressure, while exempt institutions and related payment service providers may gain more market opportunities.
Stablecoins Move Toward Institutionalization
Section overviewCanada’s draft stablecoin rules would require issuers to register, back tokens with high-quality liquid assets at a minimum one-to-one ratio, and redeem them at par, while prohibiting returns to holders. The U.S. OCC is encouraging community banks to apply for payment stablecoin issuance licenses. Ripple has received approval to operate a national trust bank and support RLUSD. Stablecoins are entering the banking, payments, and custody systems simultaneously.
Canada’s Draft Stablecoin Rules Would Ban Returns and Require Issuers to Hold Reserves at Banks
Canada published draft stablecoin rules in the Canada Gazette that would prohibit issuers from providing holders with direct or indirect returns and require non-bank issuers to hold reserves at banks. The draft also requires issuers to register, back tokens with high-quality liquid assets at a minimum one-to-one ratio, and redeem them at par. A 60-day public consultation has begun, and Finance Canada expects the framework to take effect in 2027.
OCC Encourages U.S. Community Banks to Consider Becoming Payment Stablecoin Issuers
The OCC has publicly encouraged U.S. community banks to consider applying to become payment stablecoin issuers before the licensing framework takes effect. The relevant licensing regime will take effect on January 18, 2027. Implementation rules cover reserves, redemption, custody, and risk management, and allow community bank deposits to serve as stablecoin reserve assets. The ICBA estimates that stablecoin adoption could reduce community banks’ lending capacity by nearly $850 billion.
PYMNTS10.27Ripple Receives Final OCC Approval to Operate Ripple National Trust Bank
Ripple has received final approval from the OCC to begin operating Ripple National Trust Bank. The bank will support RLUSD and is authorized to provide fiduciary digital asset custody services. Ripple has also expanded its partnership with BNY, whose digital asset custody platform now supports XRP and RLUSD.
Ripple’s RLUSD Lands on Coinbase and Robinhood Chain and Receives a Moody’s Rating
Ripple’s RLUSD received a Moody’s A2 long-term deposit rating and a P-1 short-term rating, and launched on Coinbase. The stablecoin has also gone live on Robinhood Chain. Support in the main Robinhood app is expected later this year, but has not yet been confirmed.
Tokenization of Securities Infrastructure
Section overviewDTCC launched a U.S. securities tokenization service supporting the conversion of custodial stocks, ETFs, and U.S. Treasuries into tokens. Europe plans to shift to T+1 settlement in October 2027, while the ECB is advancing the settlement of tokenized assets using central bank money. The Bank of England and Hong Kong’s Securities and Futures Commission are also separately advancing arrangements for tokenized collateral and trading in tokenized public funds.
DTCC Launches U.S. Securities Tokenization Service; Alpaca Joins 20 Participating Institutions
DTCC launched its securities tokenization service, with Alpaca among the 20 institutions that signed on at launch. The service can convert custodial U.S. stocks, ETFs, and U.S. Treasuries into tokens and redeem them. Tokenized stocks circulated through Alpaca’s network are issued by third parties and generally provide economic exposure without voting or dividend rights; DTCC, however, says its tokens retain ownership of the underlying custody-held securities and investor protections. Initial assets include Russell 1000 constituents, major index ETFs, and U.S. Treasuries. DTCC plans to add participants on a rolling basis and include more blockchain networks in 2027.
European Central BankFirst party10.29Piero Cipollone: Europe Will Shift to T+1 in 2027 and Advance Securities Infrastructure Tokenization
Piero Cipollone, a member of the ECB’s Executive Board, said that Europe will shift from T+2 to T+1 securities settlement on October 11, 2027, shortening the period from trade to securities delivery and payment to one day. T2S already supports T+1 and even T+0 settlement, and the relevant overnight settlement processes are scheduled to be adjusted in June 2027. Meanwhile, Pontes supports the settlement of tokenized assets in central bank money. The Eurosystem also plans to extend its operating hours and explore, through Appia, a European tokenized financial ecosystem based on common standards.
Bank of EnglandFirst party10.29Bank of England Proposes Regulatory Path for Tokenized Collateral in Central Clearing
The Bank of England launched a consultation supporting central counterparties (CCPs) in accepting eligible tokenized collateral. The Bank of England considers the existing regulatory framework not to be an obstacle, provided that collateral can still be valued, transferred, and liquidated when necessary, including in stress scenarios. Tokenization could improve the efficiency of mobilizing and managing collateral across jurisdictions. The consultation closes on February 12, 2027.
Fintech News Hong Kong10.26Hong Kong SFC Approves 24/7 Trading of Tokenized Public Funds on Licensed Virtual Asset Trading Platforms
Hong Kong’s Securities and Futures Commission approved secondary trading of tokenized public funds on licensed virtual asset trading platforms. Two authorized tokenized money market funds began 24/7 trading on October 26. The regulatory framework introduced in April 2026 sets requirements for trading operations, fair pricing, liquidity provision, and investor disclosures. The SFC will monitor trading and consider expanding the range of products based on market developments and experience.
Agentic Payments Expand Testing
Section overviewVisa has entered production partnerships with nearly 50 AI partners and is advancing the use of agents to complete transactions with payment credentials. Shopify has embedded Visa, Mastercard, and American Express agentic payment technology into Shop Pay. Meanwhile, banks, card networks, and payment companies have yet to establish unified rules for authorization, errors, and liability, leaving these activities facing challenges involving permission controls and risk allocation.
Payments Cards & Mobile10.30Visa Expands Agentic Commerce Infrastructure; Payment Credentials Reach 5.2 Billion
Visa is expanding its payment infrastructure around agentic commerce, stablecoins, and tokenization, with global payment credentials reaching 5.2 billion. Visa has entered production partnerships with nearly 50 AI partners and, through pilots with BILL and Billtrust, is enabling trusted AI agents to use Visa Intelligent Commerce and the Trusted Agent Protocol to execute approved invoice payments.
PYMNTS10.30Shopify Embeds Visa, Mastercard, and American Express Agentic Payment Technology into Shop Pay
Shopify has embedded agentic payment technology developed by Visa, Mastercard, and American Express into Shop Pay, and plans to allow buyers to use Shop Pay at merchants whether or not they use Shopify. Agents will not see buyers’ card information, while users can retain their existing rewards, protections, and payment experience.
Payments Cards & Mobile10.27Visa Launches Commercial Payment Anti-Fraud Solution and Tests Agent Payments
Visa launched Visa Commercial Fraud Solutions to help issuers and businesses verify suppliers, authenticate users through 3-D Secure, and set transaction-level controls based on amount, merchant category, region, and time.
Payments Dive10.28Responsibility for AI Shopping Remains Unresolved as Payments Industry Debates Rules for Agent Transactions
AI agents are beginning to shop and make payments on behalf of consumers, but banks, card networks, and payment companies have yet to establish unified liability rules. Early Warning Services CEO Cameron Fowler cited his son mistakenly buying a red infrared jacket in the wrong size through Meta’s Muse as an example, questioning whether the transaction was authorized by a person and who should be responsible for the error.
Crypto Asset Security and Enforcement
Section overviewBinance disclosed a crypto asset security incident involving approximately $6.3 billion. Circle, Tether, and the U.S. Secret Service assisted in freezing some of the stolen funds. The UK FCA and HTX reached a settlement over illegal promotions and are facilitating HTX’s withdrawal from the UK. OFAC sanctioned a network that helped North Korean IT workers transfer crypto income, while India investigated approximately $58.5 billion in cross-border crypto transactions.
Binance Suffers $6.3 Billion Crypto Asset Attack; Approximately $3 Billion Frozen
Binance said a security incident affected nearly $6.3 billion in assets. A preliminary investigation pointed to the compromised laptop of a DevOps engineer and internal service containers, with no indication that wallet private keys were exposed. Industry participants have frozen approximately $3 billion on-chain, while roughly $3.3 billion remains unrecovered. Tether froze more than 1.567B USDT, Circle froze more than 800M USDC, and Binance suspended deposits and withdrawals, pledging to cover user losses through the SAFU fund and company reserves.
U.S. Secret Service Collaborates with Circle and Tether to Freeze 2.37B in Binance Hacker Funds
The U.S. Secret Service is working with Circle to identify, freeze, and recover funds stolen in the Binance hacking incident. Circle and Tether have frozen a combined total of more than 2.37B. Circle froze more than 800M USDC, while Tether froze nearly 1.57B USDT. These assets may not yet have been recovered or returned to affected users.
FCA and HTX Settle Illegal Crypto Asset Promotion Case; HTX Exits the UK
The FCA and HTX reached a settlement over illegal crypto asset promotions in the UK. HTX will exit the UK market; UK users can no longer deposit funds, and new users are prohibited from registering. HTX made legally binding commitments through a Tomlin order, with the relevant terms remaining in effect until October 21, 2031. However, the settlement does not represent an admission of liability or wrongdoing. Existing UK users may receive a one-time 48-hour window to withdraw remaining assets after approval and completion of compliance checks.
OFAC Sanctions 10 Individuals and One Company in Network Assisting North Korean IT Workers in Russia
On October 28, the U.S. Treasury Department’s OFAC designated 10 individuals and one company for allegedly helping convert the cryptocurrency earnings of North Korean IT workers into cash and transfer them to Pyongyang. Chainalysis said those involved handled nearly $2 million in cryptocurrency conversions and approximately $3.5 million in money-laundering activity. One case showed stablecoin income being converted into ETH, consolidated through addresses, and then transferred to Garantex for cashing out.
India’s Enforcement Directorate Investigates $585M Crypto Remittance Case Involving Mudrex, Saber.money, and Instadapp
India’s Enforcement Directorate is investigating approximately $585M in cross-border cryptocurrency transactions involving Mudrex, Saber.money, and Instadapp, alleging unauthorized transfers of funds. Investigators searched four locations on 27 October under FEMA and said that RPFAS Technologies was involved in $538 million and Instadapp in $40 million of suspected irregular transactions.