US lawmakers revisit bank–fintech partnerships A new U.S. bill is taking a closer look at how partnerships between banks and FinTech companies are formed and regulated. Such collaborations have become a key way for small banks and credit unions to modernize services without overhauling core systems. Policymakers are now examining how these relationships affect stability, innovation, and responsible growth. In recent years, partnerships have shifted from optional strategy to essential infrastructure. FinTech firms are increasingly focusing on credit unions and community banks rather than large national institutions. These collaborations support services like real-time payments, digital identity, rewards programs, and AI-driven customer support. For smaller institutions, partnering with FinTechs is often a necessity rather than an experiment. These alliances help banks remain competitive while navigating limited resources and growing customer expectations. At the same time, regulatory complexity remains a major challenge, pushing both sides toward compliance-ready partnership models. The proposed Bank–FinTech Partnership Enhancement Act would require U.S. regulators to jointly study the impact of such partnerships. Lawmakers want to understand whether they improve innovation, reduce compliance friction, and support new bank formation. The bill focuses on alignment and outcomes rather than imposing new regulatory mandates.
Morgan Stanley to launch digital wallet Morgan Stanley announced plans to launch a digital wallet in the second half of 2026, the bank’s Wealth Management head Jed Finn told Barron’s Advisor. The wallet will support cryptocurrencies and other tokenized assets. Finn highlighted that this move reflects the evolving infrastructure of financial services. The bank plans to roll out trading infrastructure for Bitcoin, Ethereum, and Solana in the first half of 2026. This development aims to integrate traditional finance with decentralized finance ecosystems. The wallet is part of Morgan Stanley’s broader strategy to embrace digital assets. Morgan Stanley also intends to explore tokenization of private equity as a long-term initiative. Tokenized assets will allow faster transactions and simplified trading processes. The approach aims to reduce reliance on lawyers and enable near-instant settlements. The initiative signals the bank’s shift toward digital innovation and modernized financial infrastructure. It reflects growing institutional interest in cryptocurrencies and blockchain technology. Morgan Stanley positions itself to offer seamless access to both traditional and tokenized markets.
UK court upholds interchange fee cap despite challenge from Visa and Revolut Visa, Mastercard, and Revolut lost a legal challenge against a proposed cap on cross-border interchange fees in the United Kingdom. The High Court in London ruled that the Payment Systems Regulator has the authority to impose such limits. The decision rejected claims that the regulator had exceeded its powers. The case centered on fees charged for cross-border online card payments. Regulators moved to intervene after these fees rose sharply following Brexit. The increases applied mainly to card-not-present transactions, including e-commerce purchases. The regulator found that interchange fees for EU–UK online payments rose to 1.15% for debit cards and 1.5% for credit cards. Authorities concluded that the market was not functioning competitively. Visa and Mastercard argued that price controls could harm the payments ecosystem. Although card networks do not directly collect interchange fees, the court said they are indirectly affected by fee caps. These fees influence banks’ incentives to use specific payment networks. The ruling reinforces the regulator’s role in overseeing post-Brexit payment costs.