By Ramon Villarreal, global architect and payments lead, Financial Services, Red Hat
Looking back on the payments industry in 2025, the year was defined by the long-anticipated completion of SWIFT’s global migration to the ISO 20022 messaging standard, as well as the “summer of digital currencies” – where discussions around stablecoins and other digital currencies came into focus and took centre stage at Sibos.
Looking ahead to 2026, we can expect steps forward in several key areas, notably in the global stitching of instant payments and the maturation of digital currencies and AI, converging to redefine what is possible in financial services.
Modernising messaging beyond compliance
The official retirement of SWIFT’s MT format in November 2025 finally came to pass. Now, the challenge moves from achieving basic compliance to truly taking advantage of the structured data power of ISO 20022.
The long-awaited full potential of granular remittance information, enhanced compliance metadata, and superior reconciliation, remains untapped if back-office legacy systems and correspondent relationships aren’t fully modernised.
In 2026, the industry focus will move beyond basic technical compliance to fully operationalising the ISO 20022 standard. Organisations must update back-office systems, legacy infrastructure, and correspondent-bank relationships if they are to unlock the full potential of the richer MX data. This means moving past mere format translation to leveraging structured remittance details and cleaner compliance metadata for tangible benefits, such as superior transparency, automated reconciliation, and enhanced regulatory reporting.
To achieve this, institutions require flexible, adaptable platforms that will enable them to go beyond a mandatory regulatory transition and find strategic opportunities for data-driven innovation.
Instant payments go global
The domestic instant payment revolution, led by systems like India’s UPI and Brazil’s Pix, is now entering its cross-border phase, with initiatives like the Bank for International Settlements’ Nexus project designed to standardise the way that instant payment systems connect to each other. Rather than a payment system operator building custom connections for every new country that it connects to, the operator can make one connection to the Nexus platform.
We are entering a world where moving fiat currency across borders can be as seamless as sending a domestic payment, potentially in seconds and at low cost. This disrupts traditional correspondent banking and creates opportunities for businesses and consumers alike.
AI moves from experimentation to integration
There is a spread when it comes to organisational readiness for AI and many are moving out of exploration and into implementation, albeit via piecemeal pilots in many cases. 72% of enterprises are making AI a top priority and increasing their investment by almost a third in the next year according to recent Red Hat data, yet 7% still aren’t generating customer benefit at scale. In 2026, I expect to see a significant rise in the deployment of targeted AI use cases within payments, and I hope to see organisations moving away from silos and towards a unified platform that is accessible for all teams and can offer the consistency and control needed to build, deploy, and manage AI with any hardware, any model and any cloud. For more than 90% of respondents to our survey, enterprise open source is part of the solution here.
In the coming months, Agentic AI will begin to move beyond proofs-of-concept into areas like intelligent, self-optimising payment routing and sophisticated, real-time fraud detection systems. The focus will be on smaller, more efficient models (SLMs) tailored to specific tasks like payment remediation or data correction, prioritising explainability and control.
Regulatory frameworks, particularly the EU AI Act, will shape this adoption, emphasising the need for transparent, robust, and fair AI. The infrastructure supporting this must allow for flexible deployment, training on synthetic data in the cloud while running inference on sensitive financial data on-premises, a core strength of hybrid cloud architectures.
Stablecoins, CBDCs, and sovereignty
2026 is poised to be a decisive year for digital currencies. The regulatory landscape, exemplified by the EU’s MiCA and the US stablecoin legislation, is providing the “rules of the game,” leading to increased institutional engagement. The critical question will be which models gain mainstream traction, bank-issued money tokens, asset-backed stablecoins, or Central Bank Digital Currencies (CBDCs).
This debate will be underpinned by digital sovereignty. Whether for a CBDC or a critical national payment system, control over the underlying infrastructure is paramount. Nations and central banks cannot have dependencies on technology stacks or operational control residing in foreign jurisdictions when managing monetary sovereignty.
The regulatory impetus shaping payments
Decisions like the UK’s move towards regulatory parity with US stablecoin rules highlight a key theme for 2026: harmonisation efforts to ensure market stability as digital assets blur geographic lines.
Crucially, regulations are defining more than compliance checklists, they are influencing the economic models of new currency forms. The requirement to back stablecoins with high-quality liquid assets, for instance, directly links technological adoption to monetary policy and national balance sheets.
Adapt fast or be displaced – embrace open
For someone who has been in payments for many years, the outlook for 2026 is very exciting. We are witnessing a moment of simultaneous evolution across messaging, networks, assets, and intelligence. I am especially keen to see how the connected instant payment landscape matures and what reactions it sparks in the Americas. The digital currency space, above all, promises compelling developments as the theoretical debates of recent years yield to concrete pilots and policy decisions.
The payments market has transformed from a world of “if it works, don’t fix it” to one of “adapt or be displaced.” This constant change, driven by technology, is reshaping how the world moves value. Navigating this requires a balanced focus on relentless innovation and uncompromising resilience. That is the challenge and the opportunity that makes 2026 such a compelling chapter to anticipate, and calls for platform technology that is not only performant and reliable but also inherently interoperable and sovereign. This is where open source shines, offering transparency, flexibility and freedom to choose provider and geographic location.
Vendor-backed enterprise open source builds on community innovation with added security focus, lifecycle management, compliance, and technical support that business-critical workloads demand. Institutions must therefore choose technology partners that offer the agility to adapt to this evolving regulatory tapestry without compromising on stability.
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