The Great On-Chain Reset- SEC Charts Clearer Crypto Rules as AI Reshapes Finance From Core to Edge
May 10, 2026
1. Top Headlines
1. SEC Chairman Paul Atkins Unveils “Rules of Play” for On-Chain Trading SEC Chair Paul Atkins announced a new regulatory framework for blockchain-based markets and AI in finance, moving away from enforcement-led approaches toward formal rulemaking focused on on-chain trading, crypto vaults, and software-specific definitions. The SEC will use notice-and-comment rulemaking to revisit broker, exchange, and clearing agency definitions as they apply to DeFi protocols.
2. OpenAI and PwC Build First-of-Its-Kind AI Native Finance Function OpenAI and PwC expanded their collaboration to build AI agents for core finance processes, including planning, forecasting, reporting, procurement, payments, treasury, tax, and the accounting close. OpenAI’s own finance organization serves as “customer zero” for internal testing, with lessons feeding into broader enterprise deployment.
3. IMF Warns AI-Driven Cyber Threats Could Destabilize Global Financial Markets The IMF reported that AI is changing how financial systems handle cyber vulnerabilities while simultaneously magnifying risks, with advanced AI models enabling faster and cheaper identification of system weaknesses. The institution warned that extreme cyber-incident losses could trigger funding strains and disrupt broader markets.
4. Fed Survey: 50% of Market Participants Cite AI as a Growing Financial-System Shock The Federal Reserve’s latest Financial Stability Report showed artificial intelligence emerging as a rising financial-system concern, with half of surveyed market participants identifying AI as a potential shock to stability.
5. Embedded Finance Reaches Mainstream Inflection Point, $690 Billion Market by 2030 Embedded banking is moving from payments-led innovation to a mainstream distribution architecture, with the market projected to rise from $146.17 billion in 2025 to $690.39 billion by 2030. More than three in four companies (76%) plan to upgrade embedded finance capabilities within the next 12 months.
6. Starling Bank’s New CRO Prioritizes AI-Powered Preventative Risk Management Newly appointed group CRO Keith Algie outlined a vision to embed proactive, design-led risk systems at Starling Bank, leveraging the challenger’s cloud-native architecture to build automated, adaptive risk management capabilities as the bank prepares a major customer acquisition program.
7. Mastercard Launches SME Resilience Programme in MENA Mastercard launched “Built Small. Moving Strong,” a regional resilience program supporting SMEs facing supply chain disruption and tightening financial conditions. Key partnerships include RAKBANK committing AED 2 billion in additional credit limits and Mastercard advancing a global target to connect 500 million individuals and small businesses by 2030.
8. Sui Blockchain Announces RedotPay-Powered Slush Card for Digital Assets Blockchain platform Sui unveiled the Slush Card, a credit card for digital asset payments powered by stablecoin fintech RedotPay. The card will allow stablecoin payments and access to collateralized DeFi credit lines, with Google Pay and Apple Pay support and a US waitlist opening for later 2026 launch.
9. Ripple, JPMorgan, Mastercard Complete First Cross-Border Tokenized Treasury Redemption The consortium processed the redemption of Ondo Finance’s OUSG tokenized US Treasury fund on the XRP Ledger in under five seconds, outside traditional banking hours. The pilot demonstrates how linking public blockchains with interbank settlement rails can enable 24/7 global markets.
10. China Accelerates Digital Yuan 2.0: From Cash to Digital Deposit with Interest China’s Digital Currency Institute announced the e-CNY 2.0 upgrade effective January 2026, transitioning from simple digital cash to a full digital deposit system with interest-bearing features. The upgrade extends e-CNY from retail to wholesale and from payments to loans, deposits, and investments. New metrics show 34.8 billion transactions totaling 16.7 trillion yuan processed as of November 2025.
11. a16z Launches $2.2 Billion Crypto Fund Focused on Stablecoins and DeFi Andreessen Horowitz launched “Crypto Fund 5,” a $2.2 billion vehicle to back crypto startups at all stages over the next decade. The fund targets practical applications on crypto infrastructure including stablecoins, payments, decentralized systems, tokenized assets, and blockchain-based lending.
2. In-Depth Highlight
SEC Chairman Paul Atkins Charts a New Course for Crypto Regulation
At the AI+ Expo in Washington on May 8, SEC Chairman Paul Atkins delivered one of the most significant crypto policy speeches since taking office, announcing the agency’s intention to replace enforcement-led ambiguity with formal, software-specific rulemaking. Atkins argued that “onchain” systems—where protocols execute trades, manage collateral, route liquidity and settle transactions within unified automated code—no longer fit neatly into traditional SEC categories for brokers, exchanges, and clearing agencies.
Why this matters: The SEC is signaling a fundamental pivot after years of rule-by-enforcement. Rather than forcing decentralized protocols into legacy financial definitions, Atkins called for notice-and-comment rulemaking to revisit definitions specifically for onchain trading systems. He identified four priority areas: defining how blockchain trading systems fit within securities law; clarifying broker/dealer definitions for software interfaces; rethinking clearing agency models for instant code-managed settlement; and providing guidance on “crypto vaults,” which allow passive yield generation. This marks a stark departure from the Gensler era and could dramatically reduce legal uncertainty for DeFi developers, wallet providers, and onchain trading systems.
Key players include the SEC, Congress (the CLARITY Act regained momentum on May 1 with a compromise on stablecoin yield), and industry heavyweights from BlackRock CEO Larry Fink—who is demanding clear crypto rules to unlock tokenized securities—to the broader crypto ecosystem watching Washington. Atkins emphasized that US crypto innovation is currently at risk of moving offshore, citing the FTX collapse as a cautionary tale of what happens when legal uncertainty drives activity abroad. The regulatory impact could be transformative: if the SEC finalizes these rules, it could accelerate institutional adoption of tokenized assets, clarify the status of DeFi protocols, and position the US as a competitive jurisdiction for crypto innovation rather than a regulatory battleground.
3. Market & Industry Insight
The Agentic Economy Arrives: AI Agents Are Becoming the New Financial End-Users
The most profound shift in digital finance this week isn’t about consumers or businesses transacting—it’s about AI agents transacting autonomously. From Circle’s Nanopayments system enabling gas-free USDC microtransactions as small as $0.000001, to AWS partnering with Coinbase and Stripe to power USDC payments for AI agents, a new financial infrastructure layer is emerging where software agents become first-class economic participants.
Circle’s Nanopayments reference implementation, launched May 3, uses offchain EIP-3009 authorizations batch-settled on-chain to make high-frequency machine-to-machine payments economically viable. Use cases include pay-per-API-call services, agent-to-agent payments for compute and storage, and usage-based micropayment subscriptions. Meanwhile, AWS AgentCore Payments—using the x402 open payment protocol—achieves 200-millisecond settlement times on Base at less than a fraction of a cent per transaction, with Warner Bros. Discovery, Cox Automotive, and Thomson Reuters already exploring the technology.
The data backs this transformation: stablecoin transfer volume reached $4.5 trillion in Q1 2026, with usage increasingly tied to payments rather than speculative trading. USDC now powers over 98% of AI agent transactions, surpassing $79 billion in circulation and attracting Meta and AWS as institutional partners within a single week. Circle’s revenue reached $1.25 billion in H1 2026, nearly all from interest on the Treasuries backing USDC supply.
But this shift comes with concentrated risk. The IMF warned that advanced AI models are reducing the time and cost to identify system vulnerabilities, potentially turning cyber-risk into a “macro-financial shock.” The Federal Reserve’s latest Financial Stability Report found 50% of surveyed participants citing AI as a possible shock to the financial system. As AI agents gain spending authority, the industry must build governance, accountability, and security controls into agentic payment infrastructure before—not after—a systemic failure occurs.
4. Company & Startup Spotlight
Fun — Payment infrastructure startup Fun completed a $72 million Series A funding round on May 1, led by Multicoin Capital and SignalFire, with participation from Infinity Ventures, Pharsalus Capital, and Tinder co-founder Justin Mateen. Fun is building next-generation payment infrastructure designed to power modern financial services at scale. Why readers should care: At a time when payments are becoming increasingly embedded and autonomous, Fun’s infrastructure approach positions it as a critical enabler of both traditional and crypto-native payment flows. The size of the round—one of the largest Series A raises in payments this year—signals strong venture confidence in payment infrastructure as a foundational layer for the emerging agentic economy.
Plus1 — Swedish debt consolidation fintech Plus1 (formerly Nstart) has appointed former Klarna director Rasmus Rolén as CEO, FinTech Futures exclusively revealed. Plus1 addresses “strutsekonomi” (ostrich economy) by consolidating multiple loans into single manageable repayments that get cheaper every three months with responsible behavior. The company operates a 60-person team across Stockholm, Berlin, Wrocław, and Copenhagen, with Rolén’s mandate focused on European expansion beyond the Nordics into Germany, Poland, and Southern Europe. Why readers should care: Plus1 grew 100% last year with average customer repayment reductions of €435 per month, demonstrating how fintechs can build profitable consumer lending models around responsible financial behavior rather than exploitation. Rolén’s appointment—from Klarna, one of Europe’s most successful fintechs—signals a scaling phase that bears watching.
5. Regulatory & Policy Watch
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UK FCA progresses crypto regulatory timeline: The FCA published consultation papers for the UK’s forthcoming cryptoasset regime, with the application window for authorizations scheduled from September 30, 2026, to February 28, 2027, ahead of full regime commencement on October 25, 2027. Cryptoasset firms can request pre-application meetings from May 11.
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CLARITY Act gains momentum: The stalled crypto bill regained traction on May 1 when lawmakers reached a compromise on stablecoin yield and rewards. The compromise would restrict paying interest on passive stablecoin deposits but allow rewards tied to trading, transactions, or staking, potentially unlocking the legislative framework dividing digital asset oversight between the SEC and CFTC.
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SEC and CFTC issue joint crypto guidance: Both agencies issued guidance signaling an end to overlapping jurisdictional uncertainty for crypto assets, with the SEC taking a more software-specific approach that could help separate neutral technology tools from platforms performing regulated financial functions.
6. Quote of the Day
“A single protocol can execute a trade, manage collateral, route liquidity, execute trading strategies through vault structures and settle the transaction—all within a unified, automated system, often within seconds.”
Paul Atkins, Chairman, US Securities and Exchange Commission — Remarks at the AI+ Expo, May 8, 2026
7. What’s Next
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FinovateSpring 2026 — Concludes May 7 in San Diego; coverage and demos continue rolling out from one of the industry’s premier fintech conferences.
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FCA crypto consultation deadline — June 3, 2026, for responses to the FCA’s cryptoasset perimeter guidance, shaping the UK’s regulatory approach ahead of the October 2027 implementation.
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GENIUS Act implementation — The US federal framework for payment stablecoin issuers continues rolling out, requiring full dollar backing, independent audits, and AML controls for issuers.
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UK crypto pre-application meetings begin — From May 11, cryptoasset firms can request pre-application meetings with the FCA for the new crypto regime.
The Fintech Weekly — Delivered to 47,000+ executives, investors, and fintech professionals globally. Written by aisengtecg.com. Sources: Finextra, FinTech Futures, SEC.gov, Federal Reserve, IMF, a16z, Circle, Ripple, JPMorgan, Mastercard.
