BoE Given Mandate to Boost UK Payments Innovation

The UK government has announced a new policy shift in digital currency, expanding the role of the Bank of England to actively support innovation in digital money and payments. The move comes as the bank was criticized for being overly cautious in embracing emerging payment technologies.

The new policy extends an existing innovation duty that previously applied only to central counterparties and central securities depositories, now stretching it into BoE payment system oversight as a whole. This builds on the central bank's existing innovation objective, first introduced for financial market infrastructure.

Under the new framework, the Bank of England must report annually to Parliament on how it is advancing this objective. Financial stability remains the primary objective, but innovation has been made explicit as a secondary mandate.