Innovate Finance’s six asks tested on fraud and stablecoins

Estimated reading time: 6 minutes · Last updated: 16 September 2026

Innovate Finance has presented six Budget-period asks that press the Treasury and regulators on fraud, stablecoins and Open Finance, and industry responses accept the goals while testing the mechanisms. The trade body's submission cites that 66 per cent of authorised payment frauds in 2025 originated on online platforms, that APP fraud rose 19 per cent to £576.4m and that 89 per cent of APP losses were reimbursed by banks and payment firms. The document mixes four tax measures that are Budget-shaped with a longer regulatory programme for stablecoins, verification and Open Finance, and the report and reactions were collated, as first reported by The Fintech Times.

removes a third of the potential revenue for service providers and issuers

Janine Hirt, CEO, Innovate Finance

Six asks split between Budget fixes and regulatory change

Innovate Finance set out six discrete asks: accelerate Open Finance, create an Ofcom-designated fraud origination redress fund that pulls in social media and telecoms companies, build a national sterling stablecoin strategy, create a reusable digital verification market, restore single-licence access to the EU market, and reform EMI, CSOP and Business Asset Disposal Relief while abolishing stamp duty on shares. Four of those proposals are explicitly tax or fiscal and therefore Budget-shaped: EMI thresholds, CSOP limits, the Business Asset Disposal Relief change and stamp duty.

The remaining two groups — payment and platform liability, and the stablecoin and verification workstreams — require cross‑agency rulemaking or legislation. Innovate Finance pitched accounting standards, legal definitions and procurement choices that span the Bank of England, the FCA, the FRC and the Office for Digital Identity and Attributes, while the fraud ask needs changes to the Online Safety Act 2023, the Financial Services and Markets Act and an Ofcom designation process.

Fraud fund vs a legal duty to prevent: where firms diverge

The report argues reimbursement can re-align incentives by making platforms and telecoms pay when their services are used in scams. Innovate Finance says payments into a fund would fall as prevention improves because ‘‘firms only pay reimbursement for frauds that have used their systems’’. Industry responses divide on whether reimbursement is prevention or merely compensation.

Jonathan Frost of BioCatch favours a statutory duty to share intelligence and act in real time, arguing that ‘‘success should be measured by how many people avoid becoming victims’’. Scott Dawson of DECTA UK supports extending liability to platforms and telecoms but warns that an Ofcom redress pot must tie contributions closely to the fraud each platform enables, or it will become just another cost of doing business. The report also cites Lloyds Bank analysis that 68 per cent of purchase-fraud reports originate on Meta platforms, which underpins the case for targeting specific platforms.

Sterling stablecoins: Bank rules, competitiveness and dollarisation

Innovate Finance calls for a national sterling stablecoin strategy while industry respondents press the Bank of England on its calibration. The Bank moved the backing split for systemic sterling stablecoins from 60:40 to 70:30 in its June policy statement and the Bank’s approach requires a proportion of backing to be held in central bank deposit-like assets on which the Bank pays nothing.

Can Taner of Bitpace says that forcing systemic issuers into a 30 per cent unremunerated central bank deposit ‘‘severely penalises non-bank issuers, making sterling stablecoins uncompetitive alongside tokenised bank deposits’’. Taner adds that USD-denominated stablecoins dominate: his company notes that over 95 per cent of global stablecoin market cap is in dollars. Janine Hirt, Innovate Finance’s CEO, has warned that the Bank’s approach ‘‘removes a third of the potential revenue for service providers and issuers’’ and increases the risk of dollarisation.

Open Finance and the data problem behind 'speeding up' policy

Innovate Finance pressed for a regulatory framework for Open Finance by the end of this year, arguing the FCA’s roadmap is too slow and Treasury’s consultation scheduled for 2027 is too late. Industry leaders back the ambition but say timing without data readiness will not deliver value: Akber Datoo of D2 Legal Technology warns that faster access to poorly considered data risks ‘‘automating the wrong decision more efficiently’’. He identifies fragmented records and unclear ownership inside banks as real bottlenecks.

Scott Dawson says Open Finance needs the urgency and consumer protections that made Open Banking effective, not weaker safeguards to accelerate growth. Airwallex’s Ciaran O’Malley stresses the cross-border opportunity behind better data: the report estimates that a 3 per cent improvement in cross-border payment efficiency could unlock £56bn for UK businesses, but doing so requires joined-up implementation across regulators and industry.

How this could play out

The bottom line

Innovate Finance has framed a two-track submission: four tax measures that a Chancellor can plausibly table on 28 October 2026, and a set of cross‑agency regulatory asks that will need months of coordination. Industry respondents mostly accept the diagnosis—that platforms and payments firms face misaligned incentives—but push back hard on the mechanics. The debate now centres on designing prevention-linked measures for fraud, recalibrating the Bank of England’s stablecoin rules to preserve native liquidity, and fixing bank data so Open Finance delivers value rather than automating weak decisions. Each outcome will turn on precise design choices the government and regulators still have to make.

What to watch

• Watch the Chancellor’s Budget on 28 October 2026 for any announcements on EMI, CSOP thresholds, Business Asset Disposal Relief or stamp duty on shares.
• Watch for any government or regulator publication of an Open Finance framework by the end of 2026; Innovate Finance explicitly asks for a framework in that timeframe.
• Watch progress on the Financial Services and Markets Bill in 2027 for potential legislative changes to the Online Safety Act and payment-sector duties that a fraud redress fund would require.