UK to give Bank of England a secondary objective for digital payments innovation

HM Treasury has announced that the UK government will legislate a new secondary objective for the Bank of England, requiring it to promote digital innovation within its oversight of payments regulation. The mandate will sit beneath the Bank’s primary financial stability objective and will apply specifically to its supervision of systemic payment systems, including those that rely on digital settlement assets such as stablecoins.

The move extends a principle already embedded in UK financial law: the Financial Services and Markets Act 2023 granted the Bank a comparable secondary innovation objective covering central counterparties and central securities depositories. Adding payments to that framework brings stablecoin-based settlement infrastructure into the same regulatory posture, signalling that HM Treasury views innovation obligations and stability obligations as compatible rather than competing.

City Minister Lucy Rigby framed the objective around tokenisation and distributed ledger technology, citing their potential to transform financial markets globally and positioning the measure as part of a broader effort to keep the UK competitive in digital finance. For operators building on stablecoin rails or tokenised payment infrastructure, the practical question is whether a formally mandated innovation lens will accelerate the Bank of England’s authorisation and policy timelines for systemic digital payment systems.