The Bank of England (BoE) is to receive a new secondary objective to support innovation across payment systems and digital money, while financial stability remains its overriding priority.
HM Treasury has confirmed the new mandate as part of wider reforms aimed at strengthening the UK’s position as a global financial services hub. The objective will require the Bank to consider innovation when overseeing payment systems, including those using digital settlement assets such as stablecoins. It will also be required to report to Parliament each year on its progress.
For the payments and RegTech sectors, the key point is that the new objective will remain subordinate to financial stability.
The Bank will not be required to support innovation where doing so could threaten financial stability, meaning its existing primary responsibility will continue to take precedence.
The approach mirrors the secondary innovation objective already applied by the BoE when regulating central counterparties and central securities depositories.
That objective was introduced under the Financial Services and Markets Act 2023 and the latest reform will extend the same principle to the Bank’s oversight of payment systems.
The BoE already supervises the UK’s critical financial market infrastructure, including systemic payment systems, central counterparties and central securities depositories.
As a result, the change adjusts the mandate governing the Bank’s existing oversight rather than significantly expanding the infrastructure within its supervisory remit.
The government said the reform forms part of a wider programme involving HM Treasury, the BoE and other authorities to modernise the UK’s payments landscape and support new technologies and business models.
The annual reporting requirement will also give Parliament and the industry greater visibility into how the Bank is balancing innovation with financial stability.
The change is set to be introduced through amendments to the Financial Services and Markets Bill, which is due to be debated in the House of Lords on 7 and 9 September.
For firms operating across payments, digital money and RegTech, the legislative changes could provide a clearer indication of how the UK intends to approach emerging technologies including stablecoins, tokenisation and distributed ledger technology (DLT).
HM Treasury city minister Lucy Rigby said, “Whilst financial stability will always remain the Bank’s primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services.”
Bank of England deputy governor for financial stability Sarah Breeden said, “The Bank is doing a huge amount, together with government and other authorities, to maintain trust and drive innovation in UK payments.”
Breeden added, “This new secondary objective will further support that.”
The move comes as regulators globally face increasing pressure to adapt financial regulation to technologies that are changing how money and payments move, while ensuring new forms of digital finance do not introduce additional systemic risks.
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
