Nikolai Braiden has been in the trenches of blockchain since its early days, advising startups and incumbent institutions on how to rebuild payment and lending rails with modern tech. With the UK moving to a single framework for traditional and tokenised payments, appointing a wholesale digital markets champion, regulating AI agents, and granting an additional £1 million to CFIT, he lays out how to turn policy momentum into working markets that are safer, faster, and more open. We cover integration design, stablecoin rules, tokenisation priorities, AI guardrails, open banking mandates, supervisory consolidation, fraud-fighting data pipes, and how to scale pilots. Along the way, he shares pragmatic sequencing, governance maps, and the failure modes he’s seen up close.
A single framework now aims to cover both traditional and tokenised payments. What design principles should shape that integration, and how would you phase implementation to avoid disruption? Please share examples of sequencing, metrics you’d track, and failure modes you’d try to prevent.
Start with principle equivalence: same activity, same outcome-based obligations, regardless of whether it’s a card message or a token transfer. Phase in by product family—first account-to-account, then card-adjacent use cases—so operational teams don’t get whiplash; align this with the single framework’s rollout milestones, not a big-bang switch. I’d track settlement timeliness, dispute resolution timeliness, and prevented-loss per million transactions, with a hard eye on outages that cross channels. Failure modes to watch include fragmented identity proofs between legacy and DLT, and “policy arbitrage” where actors hop rails to dodge controls the framework expects to be uniform.
Cutting administrative burdens for stablecoin payments is a stated goal. Which specific approvals, audits, or reporting steps could be streamlined without raising systemic risk, and what safeguards should replace them? Tell us about timelines, staffing impacts, and cost-per-transaction targets you’d set.
Consolidate duplicative approvals into a single supervisory dossier and replace periodic paper-heavy attestations with continuous reporting that supervisors can query on demand. Swap quarterly narrative audits for attestations tied to on-chain proofs and real-time reserve visibility; the safeguard is traceability that equals or exceeds today’s sampling. In the near term—over a year—firms can reassign compliance staff from manual collation to exception management, with clearer playbooks and fewer meetings. I’d express cost discipline through transparency obligations rather than a numeric cap, targeting a visible downward glide path in operational overhead per transaction without naming a price point.
A wholesale digital markets champion has been appointed to drive tokenisation. What should this role prioritize in the first 12 months, and how would you measure progress across liquidity, settlement efficiency, and market participation? Please include anecdotes on coordinating regulators and market infrastructure.
In the first 12 months, lock in a reference architecture for tokenised settlement and a roadmap for market infrastructure upgrades, then run two or three pathfinder trades under the single framework. Progress means more counterparties willing to post tokenised collateral, tighter fails rates, and evidence that settlement windows are shrinking without increasing breaks. I’ve seen momentum stall when each regulator sets slightly different data expectations; a single coordination room with agendas agreed in March last year cleared weeks of back-and-forth in one afternoon. The champion’s real power is convening: getting supervisors, FMIs, and dealers to sign the same change calendar and escalation protocol.
Building tokenised wholesale financial markets requires interoperable rails. How would you design standards for identity, custody, and settlement finality across DLT and legacy systems? Walk us through a step-by-step migration path for a large dealer or CCP and the KPIs you’d monitor.
Bake identity standards around portable, regulator-recognized credentials that anchor both message-based and ledger-native flows. Custody standards should articulate responsibilities for key management and segregation that mirror legacy controls but map cleanly to smart contract roles. A dealer’s path: mirror books on a test ledger, run shadow settlement, then progressively flip specific products while preserving fallbacks; a CCP follows with novation rules that treat DLT finality as equivalent once acknowledgments meet the single framework’s tests. KPIs include reconciliation breaks, time-to-finality, and prevented-loss per million transactions during cutover.
The government plans to regulate AI agents in payment services. What use cases (risk scoring, routing, compliance) should be green-lit first, and which guardrails—testing, model cards, audit trails—are essential? Share concrete incident-response playbooks and model performance thresholds.
Start with routing and fraud risk scoring where outcomes can be continuously monitored and reversed with minimal customer harm. Require model cards, pre-production testing against historical edge cases, and immutable audit trails that tie every decision to input features and versioned models. The incident playbook should isolate the agent, roll back to a champion model, notify supervisors, and replay impacted transactions under human review; this aligns with the government’s AI inquiry and the new Online Crime Centre’s posture. I’d frame performance minima as qualitative thresholds—stable precision and recall over time—rather than pinning to a number that invites gaming.
The FCA will gain authority over open banking and new commercial payments schemes. How should mandates balance innovation with reciprocity and liability? Detail the data-sharing rules, dispute processes, and fee structures you’d codify, and provide examples from markets that got this right.
Mandate reciprocal access: if you consume, you contribute, with clear scopes for data types and refresh intervals. Codify standardized dispute windows, evidence packages, and liability allocation that doesn’t push all risk to the smallest participant. Fees should be transparent and predictable, with value-for-service tiers rather than punitive volume cliffs, so commercial schemes can scale alongside open banking. Markets that moved fastest paired supervisory clarity with pragmatic industry compacts rather than sprawling bespoke deals.
With the PSR merging into the FCA, how can supervisory duplication be reduced while sharpening accountability? Outline a practical governance map, escalation points, and joint metrics across competition, access, fraud, and resilience. Include one case study where consolidation sped up enforcement.
Build a single supervisory plan per firm with shared tooling and a named lead who owns escalation. Establish joint metrics that cut across mandates—competition, access, fraud, and resilience—so firms aren’t optimizing one at the expense of another. Escalations should move from supervisory letter to remediation plan to enforcement along a unified timeline, eliminating parallel processes. I’ve seen consolidation convert months of circular oversight into action within over a year’s cycle simply by agreeing a common dossier and one communications channel.
Stablecoin payment providers seek clarity on reserves and redemptions. What standards on backing, segregation, and intraday liquidity would you set for sterling and multi-currency coins? Please discuss stress scenarios, redemption SLAs, and disclosure cadences that build trust without stifling scale.
Backing should be high-quality, short-duration assets with transparent segregation and legal clarity on customer title. Intraday liquidity must be demonstrable so redemptions don’t depend on end-of-day netting; disclosures need to show holdings and movements at a cadence supervisors can query. Under stress, providers should honor redemptions within service windows defined in the single framework, with clear queue governance and communications. The cadence of public reporting should be predictable, complemented by continuous supervisory access rather than sporadic dumps.
Enhanced fraud prevention includes a new Online Crime Centre. How should data from banks, fintechs, telcos, and platforms be pooled to stop scams in real time? Describe technical architectures, consent flows, and success metrics such as prevented-loss per million transactions.
Use a privacy-preserving exchange that lets participants share signals without exposing raw personal data, with telcos contributing device intel and platforms contributing behavioral patterns. Consent should be built into customer journeys with a clear explanation that sharing reduces fraud, mapped to legitimate interests where appropriate. Architecturally, think event streams with well-defined schemas and a playbook for immediate interdiction when patterns light up. Success is lower false positives and higher prevented-loss per million transactions, reported consistently across sectors.
Additional funding is earmarked for the Centre for Finance, Innovation and Technology. Which industry “sandboxes” or pilots should be prioritized, and how would you turn pilots into production at national scale? Share governance, success criteria, and post-pilot procurement steps that actually work.
Aim the additional £1 million at sandboxes that cut across payments, tokenisation, and AI, so lessons compound rather than fragment. Success criteria should include live integrations with at least one market infrastructure and one regulator in the room, with a go/no-go rubric agreed up front. Post-pilot, run a structured procurement with open artifacts—reference code, APIs, test results—so multiple vendors can bid on production. The governance trick is to timebox experiments while pre-negotiating the path to scale, avoiding the endless pilot loop.
Commercial open banking payments are poised to expand. What merchant categories should be targeted first, and how do you tackle refund flows, chargeback-like protections, and recurring mandates? Provide concrete pricing models, conversion improvements, and customer-support playbooks.
Start with billers and subscription-heavy merchants where account-to-account pulls reduce friction and refunds are rule-based. Build chargeback-like protections through clear dispute windows and reason codes, with recurring mandates tied to transparent consent renewal. Pricing should be simple and predictable so merchants can plan, and conversion improves when payment pages emphasize speed and bank-brand reassurance. The support playbook centers on rapid acknowledgment, status transparency, and a single channel for resolution rather than bouncing customers.
Cross-border considerations matter as firms gain EU licenses for stablecoin services. How should the UK coordinate equivalence, passporting alternatives, and AML controls with European counterparts? Give a step-by-step plan for harmonizing technical standards and handling conflicting supervisory expectations.
Start by mapping equivalence touchpoints and agreeing a technical standards catalogue that both sides can test against. Create a joint forum to triage conflicts, with a documented process for waivers or interim measures rather than ad hoc emails. Pilot cross-border flows with limited corridors, then expand as supervisors get comfortable with monitoring and AML data exchange. Maintain a single compliance narrative so firms aren’t whipsawed by dueling expectations.
What is your forecast for the UK’s payments and tokenised wholesale markets over the next five years?
With a single framework, a named champion, regulated AI agents, and the additional £1 million fueling CFIT’s convening power, the UK can compress the journey from pilot to production. I expect tokenised settlement to move from proofs to routine flows in flagship markets, while commercial open banking becomes mainstream for billers and subscriptions. Stablecoins that meet clear reserve and redemption standards will plug into merchant and wholesale rails without feeling exotic. If we keep coordination tight and measure what matters—resilience, fairness, and prevented-loss per million transactions—the next five years will feel less like experimentation and more like dependable modernization.