Why 2026 Is a Licensing Inflection Point
Five major payment and digital asset regulatory regimes are shifting at the same time. Canada introduced a second layer of federal oversight for all payment service providers. Hong Kong is expanding its virtual asset licensing from trading platforms to four additional categories covering dealing, custody, advisory, and management. The United States passed its first federal stablecoin law and is working through a comprehensive digital asset market structure bill. The EU's MiCA transitional periods are ending, forcing every crypto-asset service provider to obtain authorization or stop operating. And Singapore tightened its rules for offshore digital token service providers while preparing draft stablecoin legislation.
For payment companies operating across multiple jurisdictions, these are not isolated changes. They are happening in parallel, with overlapping deadlines, and they collectively reshape what it takes to move money, hold value, and settle payments across borders.
This guide maps each regime: what changed, what the deadlines are, and what payment companies need to do about each one.
Timeline of Key Regulatory Deadlines
Canada: From MSB-Only to Dual Registration
For years, Canada's regulatory framework for payment companies was straightforward. If you moved money, you registered with FINTRAC as a Money Services Business (MSB). One federal registration covered all ten provinces and three territories. No bank charter needed. Entry costs were a fraction of a US multi-state money transmitter license rollout.
That changed with the Retail Payment Activities Act (RPAA).
What the RPAA Added
The RPAA created a second layer of federal oversight. Payment service providers (PSPs) performing retail payment activities in Canada must now register with the Bank of Canada, in addition to maintaining their FINTRAC MSB registration [1].
The division of responsibilities is specific. FINTRAC handles AML/CTF: who is moving money, whether they are screened against sanctions lists, and whether suspicious transactions are reported. The Bank of Canada handles operational risk: how the PSP manages end-user funds, how it handles cybersecurity incidents, and whether it has adequate business continuity and risk management frameworks [2].
The Registration Timeline
The Bank of Canada opened a 15-day registration window from November 1 to November 15, 2024. PSPs that submitted applications during that window were allowed to continue operating during a 10-month transition period while the Bank reviewed their applications. On September 8, 2025, the Bank published its PSP registry and began active supervision [3].
PSPs that missed the window or plan to start operating after September 8, 2025 must apply at least 60 days before commencing retail payment activities. Operating without registration is a violation that can result in administrative monetary penalties [4].
What This Means for Payment Companies
The practical impact is that Canada now requires dual registration for most payment fintechs. The FINTRAC MSB registration handles your AML/CTF obligations. The Bank of Canada RPAA registration handles your operational risk obligations, including a written risk management framework, incident reporting procedures, and end-user fund safeguarding plans.
For stablecoin or virtual asset businesses, the requirements layer further. You need FINTRAC MSB registration with the virtual currency permission, plus RPAA registration if you perform retail payment activities involving electronic funds transfers [5]. The dual-registered MSB+RPAA entity is now the standard for fintechs operating in Canadian payments.
The first PSP annual report under the RPAA was due March 31, 2026 [6].
Hong Kong: The VASP Regime Is Expanding Fast
Hong Kong introduced its Virtual Asset Trading Platform (VATP) licensing regime in June 2023, administered by the Securities and Futures Commission (SFC). As of early 2025, nine VATPs had been licensed [7].
That was the first phase. The regime is now expanding to cover four additional categories of virtual asset services, and the speed of expansion has caught many market participants off guard.
What's Being Added
In June 2025, the Financial Services and the Treasury Bureau (FSTB) and the SFC jointly published consultation papers proposing licensing regimes for two new categories: VA dealing (which goes beyond trading platforms to cover OTC spot trading, brokerage, and block trading) and VA custodian services (covering any entity that safeguards private keys or has the ability to transfer client VAs) [8].
Following a consultation period that closed in August 2025 and conclusions published in December 2025, the regulators moved quickly. In the same month, they published a further consultation proposing two additional categories: VA advisory services and VA management (portfolio managers investing in virtual assets) [9].
All four new regimes are being legislated under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). The FSTB has indicated that draft legislation will be introduced to Hong Kong's Legislative Council in 2026 [10].
The Stablecoin Layer
Separately from the SFC's VA regime, the Hong Kong Monetary Authority (HKMA) introduced a licensing framework for stablecoin issuers, effective from August 2025. This covers entities issuing fiat-referenced stablecoins in Hong Kong. The HKMA sets requirements for reserve backing, redemption rights, and governance. Licensed VATPs can now also distribute stablecoins issued by HKMA-licensed entities [11].
No Transitional Arrangements
Unlike MiCA in the EU, Hong Kong's new regimes will have a hard commencement date with no grandfathering or deeming arrangements for existing operators. Providers of in-scope services are being asked to contact the SFC proactively to begin the pre-application process. An expedited approval process will be available for entities already licensed under the existing VATP regime or regulated as intermediaries under the Securities and Futures Ordinance [12].
What This Means for Payment Companies
If your business touches virtual assets in Hong Kong in any capacity, including stablecoin payouts, on-ramp and off-ramp services, or custody of client virtual assets, you need to assess which of the five licensing categories (VATP, dealing, custody, advisory, management) applies to your activities.
Penalties for operating without the appropriate license are severe: up to seven years imprisonment and a HK$5 million fine [9]. The regime applies extraterritorially to overseas entities that actively solicit Hong Kong clients [8].
United States: GENIUS Act + CLARITY Act
The United States is moving on two parallel tracks: a stablecoin-specific law that is already enacted, and a broader digital asset market structure bill that is working through the Senate.
GENIUS Act (Signed Into Law, July 2025)
The Guiding and Establishing National Innovation for U.S. Stablecoins Act is the first federal legislation specifically governing stablecoins. It passed the Senate on June 17, 2025 (68-30) and the House on July 17, 2025 (308-122) [13].
The GENIUS Act establishes a regulatory framework for "payment stablecoins" with several core requirements. Issuers must maintain 1:1 reserve backing with high-quality liquid assets. Issuers are subject to BSA/AML compliance, federal oversight, and regular audits. Stablecoin issuers are prohibited from paying interest or yield to holders simply for holding stablecoin balances. Non-bank issuers must register with the OCC or operate under state-level supervision that meets federal standards [14].
The Treasury Department issued proposed rulemaking in September 2025 to implement several provisions, including rules on reserve requirements, state-level oversight equivalency, and BSA obligations for issuers [13].
For payment companies, the GENIUS Act's primary implication is that any stablecoin used in settlement or payment flows must be issued by a GENIUS-compliant entity. Circle's USDC is compliant. Tether's USDT compliance status under the GENIUS Act remains under review.
CLARITY Act (House Passed, Senate Pending)
The Digital Asset Market Clarity Act of 2025 (H.R. 3633) is broader. It establishes a comprehensive regulatory framework for all digital assets, not just stablecoins [15].
The bill passed the House of Representatives in July 2025 by a vote of 294 to 134 [16]. It addresses several foundational questions that the industry has been operating without answers to: which digital assets are securities (SEC jurisdiction) and which are commodities (CFTC jurisdiction); registration requirements for digital commodity exchanges, brokers, and dealers under the CFTC; self-custody protections written into federal law for the first time; DeFi exemptions that shield decentralized finance from traditional financial regulations; and the treatment of payment stablecoins, which are defined in alignment with the GENIUS Act [15].
Where Things Stand (May 2026)
The CLARITY Act has been in the Senate since July 2025. A Senate Banking Committee markup was repeatedly delayed due to disagreement over one provision: whether digital asset firms can offer yield or rewards on stablecoin holdings [17].
On May 1, 2026, Senators Thom Tillis and Angela Alsobrooks released a compromise text. The agreement prohibits stablecoin issuers from paying interest or yield solely for holding stablecoins, but allows incentive programs tied to actual transactions and usage, similar to credit card reward structures [18].
The Senate Banking Committee markup is expected in May 2026, with a presidential signature targeted for summer 2026 [16]. Galaxy Research estimates the probability of the CLARITY Act becoming law in 2026 at roughly 50%, with prediction markets pricing passage odds at around 44-60% as of late April [17].
The banking lobby remains opposed to the stablecoin rewards provision, with the American Bankers Association, the Bank Policy Institute, and other trade groups arguing that the compromise text still contains loopholes that could undermine traditional deposit products [19].
What This Means for Payment Companies
The GENIUS Act is already law. Payment companies using stablecoins must ensure they work with compliant issuers. If the CLARITY Act passes, it would provide the first clear jurisdictional framework for digital asset markets, ending the "regulation by enforcement" era and giving payment companies a defined path for registering digital commodity-related activities.
EU: MiCA Is Live, Transitional Periods Are Ending
The Markets in Crypto-Assets Regulation (MiCA) is the world's first comprehensive, unified regulatory framework for digital assets, and it is now fully operational.
The MiCA Phases
MiCA entered into force on June 29, 2023 and rolled out in phases. Stablecoin rules covering Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs) became applicable on June 30, 2024. The full CASP (Crypto-Asset Service Provider) authorization requirement took effect on December 30, 2024, meaning that any new entrant to the EU market must hold MiCA authorization before offering services [20].
As of September 2025, more than 40 CASPs had been authorized across the EU. Over 35 non-compliant providers had been flagged by national regulators [21].
The Transitional Period Problem
MiCA includes transitional (grandfathering) provisions that allowed existing VASPs operating under national regimes to continue operating for a limited period while they applied for MiCA authorization. But these periods vary dramatically by member state.
The Netherlands and Poland set short windows ending in mid-2025. Germany, Austria, and Ireland used 12-month periods ending by late 2025. France, Malta, Luxembourg, and Estonia extended to the maximum allowed: July 1, 2026 [22].
This means that the final EU-wide MiCA transitional deadline is July 1, 2026. After that date, any entity providing crypto-asset services in the EU without MiCA authorization is operating illegally.
The EMT/PSD2 Overlap
A significant compliance issue emerged in early 2026. From March 2026, custody and transfer services involving E-Money Tokens may require both MiCA authorization and a separate payment services license under PSD2, because EMTs are functionally electronic money [23].
This dual licensing requirement could increase compliance costs substantially for providers handling euro-denominated stablecoins. The overlap has drawn criticism from industry participants who argue it undermines Euro stablecoin competitiveness and drives issuance to non-EU jurisdictions.
USDT Delisting
Tether's USDT does not meet MiCA's EMT requirements because Tether is not authorized as an EMT issuer in the EU. This has led to USDT being delisted from major EU exchanges including Binance, Coinbase, and Crypto.com by early 2025 [23]. For payment companies processing stablecoin settlements in the EU, this means USDC (issued by MiCA-compliant Circle) is the primary option, while USDT-based flows are effectively blocked within the EU.
What This Means for Payment Companies
If you process stablecoin payments involving EU counterparties, you need to verify that your stablecoin issuer holds EMT authorization under MiCA, and that any intermediary handling the settlement is authorized as a CASP. The July 1, 2026 deadline is real: after that, all transitional provisions expire. The reward for compliance is passporting: one MiCA CASP license covers all 27 EU member states [20].
MiCA CASP License Hubs (Where Companies Are Getting Licensed)
Singapore: Tightening the Rules for Offshore Providers
Singapore regulates digital asset activities on an activity basis under the Payment Services Act (PSA). Any business providing Digital Payment Token (DPT) services to customers in Singapore needs a license from MAS, either as a Standard Payment Institution or a Major Payment Institution [24].
What Changed in 2025
The most significant change came via the Financial Services and Markets Act (FSMA) Part 9, which introduced the Digital Token Service Provider (DTSP) regime, effective June 30, 2025 [25].
The DTSP regime closes a gap that had existed for years: Singapore-incorporated entities providing digital token services solely to customers outside Singapore were previously not regulated. From June 30, 2025, these offshore-only providers must be licensed, and MAS has indicated it will generally not issue licenses for such models because it cannot effectively supervise entities whose substantive activity is outside Singapore [25].
Existing DTSPs serving only overseas customers were required to wind down this activity by the commencement date. MAS reached out directly to affected providers to discuss orderly wind-down plans [25].
The Stablecoin Framework
MAS finalized its standalone stablecoin regulatory framework in August 2023, covering Single-Currency Stablecoins (SCS) pegged to the Singapore Dollar or G10 currencies (USD, EUR, JPY, GBP, etc.) issued in Singapore [26].
Key requirements: reserve assets must equal 100% of outstanding stablecoins at all times, with monthly independent verification and annual audits. Redemption must be available within five business days at par value. Issuers need a Major Payment Institution license if the total value of stablecoins in circulation exceeds SGD 5 million. Only issuers meeting all framework requirements can use the "MAS-regulated stablecoin" label [26].
Stablecoins that do not meet these criteria (including those pegged to non-G10 currencies or those issued outside Singapore) continue to be treated as DPTs under the PSA's general rules.
MAS confirmed at the Singapore FinTech Festival in November 2025 that draft stablecoin legislation formalizing these requirements will be published in 2026 [24].
What This Means for Payment Companies
Singapore's approach is conservative and activity-based. If you provide any DPT service to customers in Singapore, you need a PSA license. If you are a Singapore entity providing digital token services to overseas customers, you now need a FSMA Part 9 license (and MAS will likely not grant it for offshore-only models). If you issue stablecoins pegged to SGD or G10 currencies from Singapore, you need an MPI license and must meet the SCS framework requirements.
What This Means for Multi-Jurisdiction Fintechs
The table above shows the minimum viable licensing picture for a fintech operating across these five jurisdictions. Several patterns emerge.
First, dual registration is becoming the norm, not the exception. Canada now requires MSB + RPAA. The EU may require CASP + PSD2 for EMT services. Singapore layers PSA + FSMA for different customer bases. The days of one license covering everything are over.
Second, stablecoin-specific rules now exist in every major jurisdiction. The GENIUS Act in the US, MiCA's EMT provisions in the EU, HKMA's stablecoin issuer licensing in Hong Kong, and MAS's SCS framework in Singapore all impose reserve, redemption, and governance requirements on stablecoin issuers. Payment companies do not need to be issuers, but they need to verify that the stablecoins they use in settlement are issued by compliant entities.
Third, transitional periods are expiring. The EU's final MiCA grandfathering ends July 1, 2026. Hong Kong is introducing new categories with no transition period at all. Companies that have been operating under legacy national regimes or interim arrangements must act now.
How to Navigate This
For payment companies assessing their licensing position across multiple jurisdictions, five steps are worth prioritizing.
Map your activities to each regime. Do not start with which license you need. Start with what you do in each market: do you hold funds, convert currencies, execute payouts, custody digital assets, or provide advisory services? Each activity maps to a specific licensing requirement under the relevant jurisdiction's framework.
Audit your stablecoin partners. If you use stablecoins for settlement, verify that the issuer holds the relevant authorization in every jurisdiction you operate in. USDC (Circle) is broadly compliant. USDT (Tether) is non-compliant in the EU under MiCA and its status under the GENIUS Act is still evolving. Using a non-compliant stablecoin can make your own operations non-compliant by association.
Build for dual registration. If you operate in Canada, budget for both MSB and RPAA. If you handle EMTs in the EU, prepare for both CASP and potentially PSD2. Structuring your compliance function to handle multiple registrations per jurisdiction is now a baseline requirement.
Watch Hong Kong closely. The lack of transitional arrangements means early engagement with the SFC is critical. If your business falls within the scope of VA dealing, custody, advisory, or management, contact the regulator before the legislation is introduced, not after.
Track the CLARITY Act. If it passes with the current stablecoin yield compromise, it will create the first clear digital commodity market structure in the US. If it stalls, the US reverts to the current state of regulatory ambiguity, and payment companies continue operating without clear SEC vs CFTC jurisdictional boundaries.
Sources
[1] Bank of Canada. "About Retail Payments Supervision Mandate." https://www.bankofcanada.ca/core-functions/retail-payments-supervision/about-retail-payments-supervision-mandate/
[2] Bennett Jones. "Upcoming Retail Payment Activities Act Regulation: Updates from the Bank of Canada." April 1, 2024. https://www.bennettjones.com/Insights/Blogs/Upcoming-Retail-Payment-Activities-Act-Regulation-Updates-from-the-Bank-of-Canada
[3] Bank of Canada. "Supervisory Framework: Registration." https://www.bankofcanada.ca/core-functions/retail-payments-supervision/supervisory-framework-registration/
[4] Osler, Hoskin & Harcourt LLP. "Retail Payment Activities Act." October 1, 2025. https://www.osler.com/en/expertise/services/financial-services/financial-services-regulatory/retail-payment-activities-act/
[5] SBSB Fintech Lawyers / Leaders in Law. "MSB License in Canada 2026: The Ultimate Guide." February 12, 2026. https://www.leaders-in-law.com/msb-license-in-canada-2026-the-ultimate-guide-by-sbsb-fintech-lawyers/
[6] 7Baas. "Canada 2025 MSB & PSP Rules: FINTRAC & RPAA Updates." November 11, 2025. https://7baas.com/canada-2025-msb-psp-fintrac-rpaa-regulations/
[7] Fireblocks. "Understanding Hong Kong's Virtual Asset Trading Platform Licensing: A Strategic Overview." February 27, 2025. https://www.fireblocks.com/blog/hong-kong-virtual-asset-trading-platform-licensing-strategic-overview
[8] Sidley Austin LLP. "Hong Kong Poised to Expand Licensing Regime to Cover Virtual Asset Dealers and Custodians." November 24, 2025. https://www.sidley.com/en/insights/newsupdates/2025/07/hong-kong-poised-to-expand-licensing-regime-to-cover-virtual-asset-dealers-and-custodians
[9] Sidley Austin LLP. "Hong Kong to Further Enhance Licensing Regime for Virtual Assets to Cover Advisors and Managers." January 8, 2026. https://www.sidley.com/en/insights/newsupdates/2026/01/hong-kong-to-further-enhance-licensing-regime-for-virtual-assets-to-cover-advisors-and-managers
[10] CoinDesk. "Hong Kong's SFC, FSTB Target 2026 Legislation for Virtual Asset Dealer and Custodian Rules." December 25, 2025. https://www.coindesk.com/policy/2025/12/25/hong-kong-regulators-target-2026-legislation-for-virtual-asset-dealer-and-custodian-rules
[11] Davis Polk. "Hong Kong Permits Virtual Asset Exchanges to Access Global Liquidity and Expand Product Offering." December 2, 2025. https://www.davispolk.com/insights/client-update/hong-kong-permits-virtual-asset-exchanges-access-global-liquidity-and-expand
[12] Slaughter and May. "Hong Kong Progresses New Licensing Regimes for Virtual Asset Dealing and Custody." https://www.slaughterandmay.com/insights/new-insights/hong-kong-progresses-new-licensing-regimes-for-virtual-asset-dealing-and-custody-consults-on-regimes-for-virtual-asset-advisory-and-management/
[13] Latham & Watkins. "US Crypto Policy Tracker: Legislative Developments." Updated April 2026. https://www.lw.com/en/us-crypto-policy-tracker/legislative-developments
[14] K&L Gates. "Crypto in 2026: The Democratization of Digital Assets." January 29, 2026. https://www.klgates.com/Crypto-in-2026-The-Democratization-of-Digital-Assets-1-29-2026
[15] Congress.gov. "H.R.3633 - Digital Asset Market Clarity Act of 2025." https://www.congress.gov/bill/119th-congress/house-bill/3633/text
[16] CoinGetter. "CLARITY Act 2026: Congress's Last Real Shot at Crypto Regulation." April 2026. https://www.coingetter.com/articles/clarity-act-crypto-legislation-may-2026
[17] CoinGetter. Ibid. Galaxy Research estimates on passage odds.
[18] CoinDesk. "Clarity Act Text Lets Crypto Firms Offer Stablecoin Rewards While Shielding Bank Yield." May 1, 2026. https://www.coindesk.com/policy/2026/05/01/clarity-act-text-lets-crypto-firms-offer-stablecoin-rewards-while-shielding-bank-yield
[19] CryptoSlate. "Banking Lobby Attempts to Kill Clarity Act's Stablecoin Progress as Markup Is Scheduled for Next Week." May 6, 2026. https://cryptoslate.com/banking-lobby-attempts-to-kill-clarity-act-stablecoin-progress-as-markup-is-scheduled-for-next-week/
[20] Hacken. "MiCA Regulation: What Crypto Projects Must Know For 2026 Compliance." April 2026. https://hacken.io/discover/mica-regulation/
[21] CCN. "MiCA Compliance Watchlist: Full List of Approved CASPs and Stablecoin Issuers." February 20, 2026. https://www.ccn.com/education/crypto/mica-compliance-watchlist-stablecoin-issuers-casps-list/
[22] Sumsub. "MiCA Regulation and EU Crypto Rules: What Changes in 2026." https://sumsub.com/blog/crypto-regulations-in-the-european-union-markets-in-crypto-assets-mica/
[23] Cyfrin. "MiCA Regulation Explained: A Guide To EU Crypto Compliance." November 21, 2025. https://www.cyfrin.io/blog/mica-regulation-explained-a-guide-to-eu-crypto-compliance
[24] WCR Legal. "Singapore Crypto Regulation 2026: MAS Framework Explained." April 12, 2026. https://wcr.legal/singapore-crypto-regulation-mas-framework/
[25] MAS. "MAS Clarifies Regulatory Regime for Digital Token Service Providers." June 6, 2025. https://www.mas.gov.sg/news/media-releases/2025/mas-clarifies-regulatory-regime-for-digital-token-service-providers
[26] BVNK. "Global Stablecoin Regulations 2026: What Enterprises Need to Know." January 16, 2026. https://bvnk.com/blog/global-stablecoin-regulations-2026
Stablecoin-related services are provided exclusively by Tazapay Canada Corp, a FINTRAC-registered Money Services Business. Tazapay Pte. Ltd. (Singapore) does not provide Digital Payment Token services under the Payment Services Act 2019.
