The U.K. government is moving to establish a new secondary objective for the Bank of England focused on supporting innovation in payment systems, including stablecoins and digital settlement assets. Financial stability will remain the central bank's primary mandate.
Under the proposal, the Bank of England would receive a formal secondary objective to support innovation in systemic payment systems and emerging technologies, including stablecoins and distributed ledger technology. City Minister Lucy Rigby stated that this secondary objective would "support the Bank to continue to drive innovation in payments and digital finance" while financial stability remains the primary focus.
The Bank of England already holds a secondary innovation objective when overseeing central counterparties and central securities depositories. The government now seeks to apply the same approach to systemic payment infrastructure that relies on digital settlement assets.
Deputy Governor for Financial Stability Sarah Breeden said the Bank welcomed the proposal, noting it would "further boost our work to support innovation in financial services without compromising on financial stability."
The change is designed to create conditions where new technologies can develop safely while contributing to economic growth. The Bank would be required to report annually to Parliament on how it is advancing the innovation objective and to establish a formal mechanism to measure progress.
The government plans to implement the change through amendments to the Financial Services and Markets Bill, which was scheduled for debate in the House of Lords on September 7 and September 9. The shift reflects a broader effort to modernize payments infrastructure and integrate digital assets into the existing regulatory framework rather than treating them as a parallel financial system.
