Executive Summary

Following the launch of the Transatlantic Taskforce for Markets of the Future by the Chancellor of the Exchequer and the US Treasury Secretary, Innovate Finance invited our members to feedback their thoughts around the purpose and aims for the taskforce. After initial consultation with a small number of our members, we launched a wider call to our members, to seek their answers to the following questions:

• Where would you like to see action to achieve regulatory equivalence between the US and the UK, and how might this benefit your business?
• Could US and UK regulators come together to lobby effectively as one voice to support the global growth for the digital economy in financial services?
• Any other areas where you think closer ties or collaborative initiatives between the UK and US regulatory authorities may benefit your business and / or support digital solutions?

The individual feedback provided coalesced around the following summary response to each question:

1. Where would you like to see action to achieve regulatory equivalence between the US and the UK, and how might this benefit your business?

We would like to see the US-UK Taskforce prioritise regulatory equivalence for fully reserved, fiat-referenced stablecoins and broader digital-asset frameworks. Mutual recognition between the US GENIUS Act and the UK qualifying stablecoin regime(s), which would treat stablecoins as payment instruments and not investments, would remove duplicative licensing and reserve rules, enable seamless issuance and use of USD and GBP stablecoins, and allow these assets to operate in payment systems and tokenised markets across both jurisdictions. The UK and US regimes should avoid divergent requirements that would require different business models in each market or frustrate cross border circulation. This should include removing any UK requirements for GBP stablecoin reserves to be located in the UK, ensuring recognition of different asset requirements (whether HQLA or central bank reserve) , and a presumption against artificial ‘holding’ limits for individuals and corporates.

Equivalence between the US and UK across stablecoin rules, related open finance standards, and tokenised capital markets frameworks would materially reduce friction in US-UK cross-border payments, support 24/7 USD/GBP settlement, and strengthen the London’s position as the Eurodollar 2.0 hub for USD stablecoin activity. Common standards for APIs, digital identity, on-chain reporting, and tokenised-asset custody would deepen liquidity, lower compliance burdens, and enable us to build interoperable, global financial products more efficiently.

We would also like to see US-UK collaboration on Regulatory Technology (RegTech) to enable cross border and international compliance solutions. This would include cooperation on regulatory data standards, to enable AI-enabled regtech solutions to ensure better, cheaper compliance for firms in both markets, and recognition of corporate digital verification and reusable digital identity to strengthen and streamline requirements such as AML and tackling fraud.

2. Could US and UK regulators come together to lobby effectively as one voice to support the global growth for the digital economy in financial services?

There is a definite appetite for this from our members as there is a recognition that the US and UK can jointly shape global standards. This could be achieved by presenting a unified position to bodies such as the Basel Committee, IOSCO, and the FSB. A shared transatlantic view on capital and liquidity treatment for fully reserved stablecoins would help prevent inappropriate capital charges, encourage other jurisdictions to adopt risk-based equivalence models, and provide global clarity that well-regulated stablecoins are safe instruments for payments, settlement, and collateral. In addition, joint work in international standards bodies to develop regulatory data sharing and corporate digital identity would further unlock international regtech solutions for UK and US firms.

3. Any other areas where you think closer ties or collaborative initiatives between the UK and US regulatory authorities may benefit your business and / or support digital solutions?

Closer cooperation between UK and US regulators would strengthen the environment for digital-asset innovation and reduce friction for cross-border financial services. A coordinated approach to regulatory sandboxes i.e. by linking the FCA’s Digital Securities Sandbox with emerging US pilot programmes, would enable supervised testing of tokenised payments, collateral settlement, and stablecoin use cases across both jurisdictions. There is also an opportunity to extend the UK regulators’ approach to ‘live testing’ (eg for AI applications in financial services) and pilot cross border US-UK live testing.  This should be focused on live applications of cross border transactions and services.

Harmonising AML / Travel Rule implementation, operational resilience requirements, and cybersecurity standards, would likewise streamline compliance and enhance the safety and integrity of multi-jurisdictional digital-asset activity.

There is also significant value in joint exploration of emerging market structures, including self-custody and decentralised trading of tokenised equities, as well as coordinated research on CBDC-stablecoin interoperability.

Developing common Corporate Digital Identity standards would provide the shared trust infrastructure needed for efficient onboarding, improved transparency, and future joint-supervisory frameworks. Together, these initiatives would lower barriers to innovation, support the development of interoperable digital-finance solutions, and advance a coherent transatlantic approach to the future of financial markets.

In summary:

​​US and UK regulatory equivalence would enable seamless stablecoin usage, interoperable tokenised markets, and faster cross-border payments while reducing duplication and strengthening London as a Eurodollar 2.0 hub - all unlocking a truly transatlantic digital finance corridor.

Coordinated frameworks for sandboxes, AML/Travel Rule compliance, operational resilience, digital identity, and joint US-UK global standard setting would promote regulatory technology solutions (with better compliance, at lower cost), safe innovation, enhance transparency, and build a trusted ecosystem.  Given the positioning of London and New York as two of the world’s global financial centres, this will provide the necessary international leadership we need for the digitalisation of financial services in the 21st century.

Detail:  Consolidated Feedback from Innovate Finance members:

1. Where would you like to see action to achieve regulatory equivalence between the US and the UK, and how might this benefit your business? Innovate Finance members have identified a number of areas that directly affect the UK’s ability to to operate globally and scale digital financial infrastructure, areas which would benefit from greater regulatory equivalence between the UK and the US.  These are as follows:

Stablecoin Regulation and Supervisory Alignment

The most impactful step would be mutual recognition and functional equivalence between the US GENIUS Act and the UK’s forthcoming stablecoin regime. A shared interpretation of fully reserved, fiat-referenced stablecoins as payment instruments rather than investments would allow USD and GBP denominated stablecoins to move seamlessly between both markets.

This would enable cross-border use of stablecoins which is critical to support more efficient cross-border payments and global digital markets.

However, ahead of such a step, the following regulatory actions are needed to ensure global stablecoins can be used effectively:”

• Under the US GENIUS Act, overseas stablecoin regimes need to be recognised for stablecoins from those jurisdictions to be used in the US, and there is also the potential for enhanced reciprocity (see section 18 of the Act). The UK should be seeking this status as the first overseas jurisdiction to do so.
• The Bank of England and the FCA need to be open to 'multi-issuance' models where a stablecoin holds reserves in multiple jurisdictions. Whilst it is expected that both the US and EU will require some reserves to be held locally by overseas stablecoin issuers, so the FCA and BoE proposals to require 100% of reserves to the held in the UK are likely to prevent UK stablecoins being used in the US and EU - potentially a huge own goal, which could bring significant harm to the the international role of GBP at a time when multi-issuance models are being seriously considered against a backdrop of an as yet undefined international model for digital finance models.

Therefore, at the same time or as part of this process and dialogue, it is critical to address the current UK proposal requiring all GBP stablecoin reserves to be held domestically. This effectively rules out these stablecoins being offered in the US or EU, since both of those jurisdictions require a portion of reserves to be held locally.  This urgently needs to be addressed given the opportunity to build the international role for GBP.  The US and UK can work together on regulatory frameworks for global stablecoins.A coordinated framework for global, interoperable stablecoins would support the international role of both USD and GBP.  

Furthermore, all this leads to a sense that a greater use of equivalence across the US and UK in the provision of crypto-asset services such as by intermediaries. Equivalence would remove duplicative licensing and reserve-segregation requirements, enable consistent prudential and conduct standards for issuance and redemption, and allow USD stablecoins to be used in UK payment systems and tokenised markets without the need for re-authorisation.

This should include:

• Stablecoins for cross-border settlement – Supporting adoption of regulated stablecoins in financial markets, including cross-border payments, settlement of large value digital transactions and use as collateral.
• Eligibility of tokenized collateral – Enabling stablecoins and other tokenized assets to be recognized as eligible collateral in wholesale markets, unlocking efficiency in repo, margin, and settlement operations.
• Cross-border equivalence for intermediaries – Establishing reciprocity between UK and US regimes to enable licensed crypto intermediaries to operate across both markets without duplicative requirements. This could be based on reciprocal recognition of regulatory frameworks, or on exemptions where customers are relatively sophisticated.
• Proportionate and co-ordinated rules for industry participants – Ensuring crypto firms and other financial institutions engaging in crypto such as banks and payments firms have access to harmonized, fit-for-purpose requirements, rather than a patchwork of inconsistent rules.

For example, if an exchange, a broker or a custodian meets UK or US standards, they should be able to offer their services cross-border.

Therefore, rules that would require a significantly different business model and impose undue costs for business investment - such as stablecoin holding limits for individual and corporate - should be reviewed to strengthen cross border investment, transactions and services.

Cross-Border Payments and Open Finance

Aligning standards for open-banking APIs, digital identity, and on-chain transaction reporting would connect the UK’s open-finance infrastructure with emerging US real-time payment systems.

Common standards for tokenised fiat settlement would materially reduce friction for cross-border B2B, treasury, and remittance flows—enabling 24/7 USD/GBP payment corridors and strengthening London’s position as the Eurodollar 2.0 hub for USD stablecoin trading and settlement.

Tokenisation of Capital Markets

We also encourage alignment between the Bank of England / FCA Digital Securities Sandbox and evolving US SEC / CFTC digital-asset rulemaking. With the CFTC now moving to allow stablecoins as collateral in digital capital markets, common standards for on-chain custody, disclosure, and redemption would enable interoperability between tokenised assets and stablecoins across both jurisdictions.

This would support deeper liquidity, improve cross-border market access, and advance US-UK leadership in tokenisation and real-world assets (RWAs). Coordination should not be limited to sandbox linkages; frameworks should also allow interoperability with US market infrastructure outside formal sandboxes.

Eligibility of tokenised assets as collateral is increasingly being discussed as a priority issue.  Whilst there is no fundamental legal bar preventing the use of tokenised assets, the legal and regulatory framework currently in place makes this use case inefficient compared to traditional forms of collateral, simply because that framework is not technology-neutral.  Major banks are hesitant to accept tokenised assets as collateral despite significant client demand because of the uncertain legal and regulatory status of these offerings. The UK is not alone in considering and updating relevant rules, with the CFTC recently revising and publishing their own clarifications on tokenised assets as collateral. This suggests there may also be an opportunity for the UK-US Taskforce to agree on a common approach which would serve to strengthen digitalised markets and trade across the Atlantic.

Broader Crypto-Asset Regime Alignment

Mutual recognition of crypto-asset regulatory regimes more broadly would give consumers and institutions in both markets access to deeper liquidity and harmonised investor protection standards.

Summary of benefits for our businesses:

Achieving US-UK regulatory equivalence would:

• reduce duplicative compliance and licensing costs;
• enable seamless issuance and use of USD and GBP stablecoins across both markets;
• support large-scale, low-friction cross-border payments;
• unlock integrated tokenised-asset markets;
• reinforce London’s role as a global USD stablecoin trading and settlement venue; and
• provide clarity and predictability for building interoperable, global digital-finance products.

2. Could US and UK regulators come together to lobby effectively as one voice to support the global growth for the digital economy in financial services?

Our members agreed that US and UK regulators could come together to lobby and provide a unified leadership voice on global standards.

It was recognised that the US and UK have a unique opportunity to jointly influence international standard-setters such as the Basel Committee, IOSCO, and the Financial Stability Board to ensure that fully reserved stablecoins are treated distinctly from tokenized bank deposits or speculative crypto-assets. A transatlantic consensus on capital and liquidity treatment could prevent punitive capital charges on fiat-backed stablecoins; encourage other jurisdictions (EU, UAE, Singapore, Hong Kong) to adopt risk-based equivalence models; and provide global clarity that well-regulated stablecoins are safe instruments suitable for settlement, collateral, and payments.

The US and UK are well positioned to lead globally on crypto coordination - particularly as international initiatives (such as Basel’s crypto exposure standards) face implementation challenges. We would particularly welcome a joint US-UK approach to Basel standards for banks' exposures to crypto, to ensure that capital treatment for digital assets, especially fully reserved stablecoins and tokenised cash instruments, is risk-appropriate and does not inadvertently stifle innovation or push activity offshore.

Joint leadership on globally consistent frameworks would support innovation while ensuring robust risk management.

3. Any other areas where you think closer ties or collaborative initiatives between the UK and US regulatory authorities may benefit your business and / or support digital solutions?

Our members also identified several further areas where closer cooperation and collaboration between UK and US regulators would materially support our operations, reduce friction, and accelerate the development of digital financial infrastructure.

These are as follows:

Joint Sandboxes and Cross-Border Pilot Environments

A coordinated innovation corridor between the FCA’s Digital Securities Sandbox and emerging US Treasury / Federal Reserve pilot programs would enable supervised, real-market testing of cross-border tokenised payments and collateral settlement.

Early discussions, including comments from US Commissioners such as Hester Peirce, suggest growing interest in a transatlantic sandbox model. Shared supervisory oversight would allow firms to run pilots once, rather than separately in both jurisdictions, accelerating the deployment of tokenised financial market infrastructure and regulated stablecoin use cases.

This should also include cross-border ‘live testing’ - building on the approach taken by the FCA to artificial intelligence, GBP stablecoins and the Bank of England's approach to the digital securities sandbox.

This should not be limited to sandbox linkages only. Perhaps the UK sandbox can link to US issuances / intermediation outside of a formal sandbox, or maybe from multiple corporate-owned sandboxes

Harmonised AML / Travel Rule and Data Standards

Mutual recognition of AML / CFT requirements, specifically the Travel Rule and associated data-exchange protocols, would eliminate redundant compliance layers for firms operating across both markets. Common technical standards for data fields, transmission protocols, and verification requirements would allow for consistent implementation, reduce false positives, and improve effectiveness in monitoring risk across borderless digital transactions.

Cybersecurity and Operational-Resilience Alignment

Digital-asset businesses often face duplicative operational-resilience testing across the US and UK. Establishing equivalence or mutual recognition of frameworks for cyber controls, incident reporting, and third-party risk management would streamline oversight while maintaining robust protections. This is particularly important for multi-jurisdictional payment firms and tokenised-asset platforms that depend on continuous uptime and coordinated incident response.

CBDC - Stablecoin Interoperability and Wholesale Settlement

With both jurisdictions exploring CBDC and private-sector settlement models, coordinated research and pilot work including building on mBridge, Project Guardian, and the UK Digital Securities Sandbox would help ensure interoperability between central-bank money and regulated stablecoins. Aligning settlement, messaging, and identity standards would reduce fragmentation and ensure that future wholesale settlement systems can support cross-border tokenised financial markets.

Decentralised Trading and Self-Custody of Tokenised Equities

Forthcoming no-action relief in the US to permit self-custody and peer-to-peer trading of tokenised equities presents an opportunity for joint exploration of decentralised market models. A coordinated approach by the UK and US could help unlock new pools of capital, expand retail and institutional access, and ensure that emerging DeFi-based trading mechanisms operate within safe, regulated boundaries.

Corporate Digital Identity as Shared Regulatory Infrastructure

A harmonised Corporate Digital Identity (CDI) framework would provide a consistent, real-time view of legal entities and beneficial ownership across the US and UK. CDI would strengthen AML / CFT oversight, streamline KYC onboarding, and reduce duplicative document checks. CDI serves as foundational infrastructure for more advanced collaboration - supporting joint supervision, cross-border digital identity frameworks, and efficient regulatory reporting.

Establishing common identity attributes and documentation protocols will not only streamline onboarding but also provide the trust infrastructure needed for more advanced regulatory cooperation, including joint supervision and future digital identity frameworks that can scale beyond AML/CFT oversight.

As the Taskforce looks to accelerate innovation in capital markets and digital assets, shared CDI standards will be essential. There are already various initiatives underway in the UK led by CFIT and FMSB which could provide foundations for this.

Input into International Prudential Standards

The Taskforce could jointly contribute to the Basel Committee’s ongoing review of digital assets prudential capital standards. As referenced under the previous question above, a unified US-UK position would help ensure that capital treatment for digital assets, especially fully reserved stablecoins and tokenised cash instruments, is risk-appropriate and does not inadvertently stifle innovation or push activity offshore.

Summary of benefit to our businesses:

These initiatives, spanning supervisory coordination, shared technical standards, identity infrastructure, and sandbox alignment, would significantly reduce regulatory friction for cross-border digital-asset activity. They would also support the safe development of tokenised markets, expand the role of regulated stablecoins, and create an innovation-friendly transatlantic environment for digital finance.