Last month, I joined government and industry stakeholders from both sides of the Atlantic at the U.S.–U.K. Transatlantic Taskforce on Markets of the Future. The session brought together U.S. Treasury, the FCA, the Bank of England, and agencies including the SEC, CFTC, FDIC, OCC, and Federal Reserve, alongside asset managers, global banks, payment platforms, and digital asset infrastructure providers.

The discussion was substantive and specific. Participants named real friction points: punitive Basel capital treatment keeping banks out of tokenized markets, definitional mismatches between U.S. and U.K. money market funds, sandbox structures that inadvertently exclude non-U.K. entities, and the gap between where stablecoin policy intent is heading and where operational realities sit today.

I want to share the perspective Notabene brought to the table as it cuts to something foundational that often gets lost in the broader regulatory harmonization conversation.

As tokenization and stablecoin settlement scale, the question is not whether we regulate — it's whether supervision is interoperable across jurisdictions.

Right now, the policy intent between the U.S. and U.K. is largely aligned. The operational realities are not. From Notabene's position — operating the largest AML Travel Rule-compliant network for regulated institutions, connecting thousands of counterparties across more than 100 jurisdictions and facilitating over $2 trillion in annual transaction volume — we see exactly where that friction lives. Here is where we focused.

Interoperability Is the Friction Point

The Travel Rule is not a niche crypto requirement. It is a core FATF standard designed to ensure that cross-border value transfers carry originator and beneficiary information. Over 100 jurisdictions are now implementing some version of it. Interoperability is no longer theoretical, it is foundational to how digital asset markets function safely across borders.

But the U.S. and U.K. implementations diverge in ways that create real, daily compliance asymmetry. In the U.K., firms must transmit core Travel Rule information for crypto transfers regardless of amount, with enhanced requirements once transfers exceed roughly €1,000 in cross-border contexts. In the U.S., Travel Rule obligations generally trigger at $3,000, with different implementation mechanics.

Even though the policies are aligned, that difference alone creates operational friction. A U.K. firm is obligated to receive information on a broader set of transfers than a U.S. counterparty is legally required to send. U.K. firms are also required to report non-compliant U.S. counterparties to the FCA — even where the U.S. counterparty transmitted no data because it had no obligation to do so under U.S. regulations.

This is not a disagreement about AML policy. Both jurisdictions are committed to the same underlying objective. It is a systems interoperability problem — and it has a tractable solution. Alignment on a minimum interoperable data schema and response protocol for cross-border regulated transfers would resolve it. The forthcoming adjustments to align with the revised FATF Recommendation 16 present a timely, concrete opportunity.

Trust Frameworks Should Be Machine-Readable

Both jurisdictions expect firms to conduct risk-based due diligence on counterparties — verifying regulatory status, Travel Rule compliance capability, and safeguards around transmitted personal data. That expectation is sound.

The execution is not. Today, that diligence is largely manual and duplicative. If a U.S. institution and a U.K. institution are both supervised entities, there should be a standardized, machine-readable way to recognize that status and its scope. Not a PDF exchange. A structured, interoperable counterparty trust taxonomy.

This reduces friction while strengthening assurance. That is harmonized supervision done well and critically, it does not require identical regulatory regimes. It requires a shared vocabulary for recognizing equivalent outcomes.

Programmable Compliance Solves the Irreversible Settlement Problem

One of the defining operational challenges in digital asset markets is that once a transfer settles, reversal is difficult. Returning funds can introduce operational, liquidity, and sanctions exposure which are the very risks compliance frameworks are designed to prevent.

U.K. guidance produced by the Joint Money Laundering Steering Group already contemplates confirmation mechanisms to ensure that beneficiary information aligns before value is finalized. That instinct is correct. Programmable compliance is where it becomes actionable.

A pre-settlement authorization layer, which was introduced as an infrastructure upgrade to virtual asset transactions, that allows institutions to validate identity, confirm regulatory status, attach structured compliance metadata, and enforce AML policy before assets move. That transforms the Travel Rule from a recordkeeping obligation into a preventative control.

As stablecoins increasingly serve as settlement rails for tokenized activity, pre-settlement authorization is not an enhancement — it is a prerequisite for safe cross-border scale.

Without interoperable pre-settlement controls, cross-border settlement risk does not stay constant as these markets grow. It scales with volume.

Regulator Visibility Requires Harmonized Protocols

Regulators on both sides of the Atlantic are flying partially blind when Travel Rule exceptions occur cross-border. Without shared reason codes or common escalation thresholds, a compliance failure that is visible to the FCA may produce no signal at all for a U.S. counterpart and vice versa.

Open messaging standards already exist that would enable structured, machine-readable compliance exchange. The Transaction Authorization Protocol (TAP) — the open standard that Notabene Transact and Notabene Flow are built on — is designed precisely for this: allowing verified entities to exchange compliance data securely and consistently before settlement. The point is not to mandate any single framework. It is to recognize that programmable interoperability is technically achievable today, and that aligning around open standards rather than bespoke bilateral integrations would materially reduce friction while strengthening supervisory oversight.

The Window Is Now

The session surfaced broader themes beyond Travel Rule mechanics — punitive Basel capital treatment keeping well-capitalized banks on the sidelines, definitional mismatches between U.S. and U.K. money market funds complicating tokenized collateral use cases, and open questions about how stablecoin issuance recognition will work across jurisdictions as the GENIUS Act moves into implementation.

Running through all of it was a consistent message from industry: we do not need identical rules. We need the rules we have to be interoperable. And we need that interoperability built into infrastructure — not achieved transaction-by-transaction through manual reconciliation.

What stood out about this session was the level of specificity on both sides. Regulators genuinely in listening mode. Industry participants naming concrete friction points rather than offering generalized calls for clarity. That is the right conversation to be having, and the right format for having it.

The taskforce indicated that recommendations will be delivered to the U.S.–U.K. Financial Regulatory Working Group this summer, ultimately reaching the Chancellor and Treasury Secretary. Written follow-up from industry is welcomed and encouraged.

For those who want to shape what comes next: now is the moment to be specific.