Bank of England Gets New Objective to Boost Payments Innovation

The UK government has proposed setting a new objective for the Bank of England to facilitate innovation in payments. This secondary objective will be added to the Bank's primary financial stability goal. The House of Lords has agreed to amend the Financial Services and Markets Bill 2026, which includes inserting this new objective into the Bank of England Act 1998.

The new objective requires the Bank to support innovation in payment systems and related services, including those using digital settlement assets such as stablecoins. This is an extension of the Bank's existing approach to facilitating innovation when regulating central counterparties and central securities depositories.

The amendment also includes new accountability measures, which will require the Bank to report annually to HM Treasury on its progress in advancing this secondary objective for payment systems, as well as for CCPs and CSDs. The Government can use remit letters to highlight aspects of their economic policy that the Bank should consider when advancing the payments innovation objective.

This new objective is part of the UK government's broader vision for reforming the country's payments system, including the National Payments Vision. Firms subject to supervision can expect the Bank to be more proactive in considering the impact of its policymaking on new technologies and business models.