The UK government plans to give the Bank of England a formal new role in supporting innovation across digital money and payments, while leaving the central bank’s core financial stability duty intact. The Treasury intends to add “promoting innovation” as a secondary objective in the Bank’s regulation of payment systems.
The proposal is part of a broader effort to improve the UK’s position in digital finance. Ministers have highlighted tokenization and distributed ledger technology as areas that could significantly change global financial markets, and the latest step comes as the Bank has also eased back from a tougher approach to stablecoin limits.
Treasury targets payments rulebook
Under the planned change, the Bank of England would be expected to consider innovation when supervising payment systems, but only as a secondary objective. Its primary objective of preserving financial stability would remain unchanged.
The government says the adjustment is intended to strengthen the UK’s competitiveness in digital finance. In practice, it would extend an innovation-focused secondary objective already used in the regulation of central counterparties and central securities depositories into the area of payments oversight.
Digital finance priorities
The Treasury has pointed to tokenization and distributed ledger technology as priority fields with the potential to reshape how financial markets operate globally. By embedding innovation more clearly into payments regulation, the government is signaling that it wants the UK framework to better accommodate new forms of financial infrastructure.
That stance fits with wider UK efforts to build a stronger position in digital assets. The article links the latest proposal to those broader policy moves, including a previously formed joint task force with the United States aimed at promoting stablecoins.
Shift in stablecoin approach
The move also follows a recent change in tone from the Bank of England on stablecoin oversight. The Bank has withdrawn plans to cap holdings, softening an earlier position amid concerns that such limits could restrain industry growth.
Even so, the government and the Bank say innovation should be encouraged in a way that preserves confidence in the UK payments system. That framing suggests the authorities are trying to balance support for new technology with their longstanding focus on resilience and trust in core payment infrastructure.
What comes next
The next confirmed step is the Treasury’s plan to add the innovation objective to the Bank’s payments regulatory remit. If carried through, the change would formally align payment systems oversight more closely with other parts of the UK market infrastructure regime where innovation is already written into the supervisory framework.
For now, the confirmed policy direction is clear: the UK wants the Bank of England to play a more explicit role in enabling innovation in payments and digital money, while continuing to treat financial stability as the overriding priority.
Source: en.bloomingbit.io