The US Department of Treasury issued a request for comment on the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Read the full and detailed response of BAFT on this request for comment.
BAFT responds to US Treasury’s request for comment on Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
Via Trade Finance Global by Doga Usanmaz
- Geopolitical tensions and shifting trade corridors are requiring banks to adapt to political risks and regional economic changes.
- Europe’s focus on financial sovereignty is driving strategic investment into sectors like energy and defense.
- Regarding digitalisation, challenges remain in balancing technological innovation with social impacts, particularly in developing regions
Rerouted trade corridors, regional fragmentation, a currency arms race… these are no longer distant possibilities. They are active geopolitical and macroeconomic forces, reshaping transactional banking.
At this year’s BAFT Global Council’s Forum in Frankfurt, Germany, a panel of senior leaders from prominent global and regional banks explored how shifting political tensions and economic dynamics are creating deep uncertainty for the industry, and how banks are adapting their strategies, infrastructure, and client relations in response.
The panel, moderated by Nick Smit, head of financial institutions at ING Bank and chair of BAFT’s board, found that transactional banks are being rewired to confront political risk, digitisation, and technological disruption. The panel provided a region-by-region exploration of the subject, and some interesting parallels came up.
Via Global Trade Review by Jenny Messenger
The demise of the UN-backed Net Zero Banking Alliance (NZBA) has highlighted how difficult it is to create single standards for the global financial sector, the Bankers Association for Finance and Trade (Baft) has said.
The NZBA officially shut down earlier this month after members voted to end the alliance and instead use its guidance as a framework for setting net-zero targets.
The decision, which comes after a rocky year for the organisation in which several major banks exited, illustrates the challenges of aligning multiple banks across the globe, says Baft.
“What the disbanding of NZBA shows is the difficulty of establishing single standards that are flexible enough to accommodate the many bank operating models and regional variances on sustainability goals,” says Andy Price, vice-president, international policy, and sustainability and ESG lead at Baft.
Via Trade Treasury Payments by Deepesh Patel
The shift to ISO 20022 marks one of the most significant changes in global financial infrastructure in decades. ISO 20022 is a universal messaging standard that uses structured, machine-readable XML data to describe financial transactions. It replaces SWIFT’s legacy MT (Message Type) format, which has been in use for more than 40 years and relies on unstructured text fields with limited capacity for automation and analytics.
SWIFT introduced ISO 20022 for cross-border payments and reporting (CBPR+) on 20 March 2023, launching a three-year coexistence period in which both MT and ISO 20022 (MX) messages could be exchanged. This period ends on 22 November 2025, when SWIFT will retire MT messages in Categories 1, 2, and 9 in bank-to-bank communication. After that date, all cross-border payments, bank-to-bank transfers, and cash-management messages must be sent and received in ISO 20022 format.
These categories include common flows such as MT103 (customer credit transfer) and MT202 (bank transfer), which are being replaced by pacs.008 and pacs.009, as well as MT940 statements, now superseded by camt.053.
For banks, corporates, and treasurers, the migration enables richer, more consistent data for reconciliation, sanctions screening, and analytics. For the wider trade, treasury, and payments (TTP) ecosystem, ISO 20022 creates opportunities to enhance supply-chain visibility, improve straight-through processing, and align cross-border and domestic systems under a single standard.
BAFT’s ISO 20022 Migration Lessons Learned paper, drawing on insights from leading global banks, outlines key takeaways from this transformation. The following ten lessons summarise what has worked, where challenges remain, and how institutions can prepare for the final phase.
BAFT is featured in two articles in Trade Finance Global’s latest issue. To read the full articles, click here.
“BAFT Strategic Independence in an era of geopolitical complexity“
After more than two decades under the American Bankers Association (ABA) umbrella, the Bankers’ Association for Finance and Trade (BAFT) is charting a new course as an independent organisation. The
separation, effective September 2025, will be in response to an increasingly fragmented global financial
landscape.
Try to conceptualise the financial landscape of 1921. In the direct aftermath of the First World War, many European economies were burdened by war debts and reparations, particularly Germany under the Treaty of Versailles; the US emerged as the world’s leading creditor nation, shifting the financial centre of gravity from London to New York; global trade and investment were disrupted; and the gold standard, though still influential, was under strain as countries struggled to stabilise their currencies.
Also in 1921, the Bankers’ Association or Finance and Trade (BAFT) was established, uniting 10 banks in
midwestern US to expedite business transactions of their international trade customers….
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“5 takeaways from the BAFT Global Annual Meeting 2025: The tug-of-war between localisation and collaboration”
Navigating the trade finance landscape, with constant dodgeballs in the form of geopolitical tensions,
regulatory requirements, and threatening technology, requires considerable agility. But this year’s BAFT Global Annual Meeting, in Washington, DC, revealed the considerable opportunity in times of turbulence.
Navigating the trade finance landscape, with constant dodgeballs in the form of geopolitical tensions, regulatory requirements, and threatening technology, requires considerable agility. But this year’s BAFT Global Annual Meeting, in Washington, DC, revealed the considerable opportunity in times of turbulence…
Via Global Trade Review by Jenny Messenger
Baft (Bankers Association for Finance and Trade) and other industry bodies have urged EU member states to be consistent in implementing the Capital Requirements Directive (CRD) 6 to avoid disrupting cross-border financial services.
CRD6 is the latest iteration of the directive that requires banks and investment companies to put aside capital as insulation against financial shocks, and will ensure EU firms are aligned with outstanding aspects of Basel 3.
Previously, banks headquartered in non-EU countries could provide services like loans and guarantees in the EU without a physical presence by relying on cross-border waivers.
But changes under the regulation will bring in the branch requirement, meaning that third-country banks and large investment firms must operate through locally licensed branches, unless an exemption applies.
The European Commission published CRD6 in June 2024, and the directive must be transposed into the national law of each EU member state by 10 January 2026. The branch requirement will enter into force from 11 January 2027.
Yet some countries’ proposed legislation differs from the CRD6 text in “several significant areas relating to the branch requirement” and the activities that are exempt from it, the industry groups say.
Alongside Baft, the position paper is supported by UK Finance, the Bank Policy Institute, the Swiss Finance Council, the Loan Market Association, the Association of Foreign Banks and the Japanese Bankers Association.
“A national transposition of the branch requirement that omits or unduly narrows these exemptions and carve-outs is not aligned with the intended scope” and would “introduce uncertainty and unnecessary risk to the stability of the local banking market”, the paper says.
The exemption covers core banking activities that involve inter-bank business, intragroup business or reverse-solicited business – where a client contacts a firm first.
It also applies to core banking services, including ancillary services like taking deposits or granting loans, related to the Markets in Financial Instruments Directive (Mifid).
“We would advocate that all member states ensure that they faithfully transpose the branch requirement in this regard, ensuring that core banking services connected with Mifid services are exempt,” the paper says.
The branch requirement also does not apply to existing contracts entered into before 11 July 2026.
Custody services, which enable corporates and institutional investors to hold international assets and settle cross-border transactions, could be particularly at risk if member states’ legislation is imprecise.
“Lending by custodians is an intrinsic part of transaction settlement and, therefore, integral to the smooth functioning of capital markets,” the paper notes.
Other consequences of a fragmented system could be interruptions in banking services for EU clients, higher costs for service recipients and fragmentation of liquidity pools.
There is also the risk that European recipients of third-country core banking services could move out of jurisdictions with reduced flexibility, the paper adds.
In response, the industry groups have recommended that ambiguities over the exemptions be clarified.
For example, they argue the follow-on right in reverse solicitation – which covers products or services that are closely related to those initially requested by the client – should be explicitly referenced.
The associations’ position paper includes sample text to make sure member states harmonise the regulation of cross-border banking services and avoid “gold-plating” the legislation.
Uncertainty over CRD6 is the latest challenge arising in the EU’s implementation of the Basel framework.
Banks last year were spared what they said was a potentially significant blow to trade finance when the EU decided not to implement parts of the framework that would have more than doubled capital treatment for off-balance sheet trade finance instruments.