UK Proposes Secondary Mandate for Bank of England to Focus on Digital Payments Innovation

The UK government has proposed giving the Bank of England a secondary mandate to focus on innovation in digital payments. This move aims to keep financial stability as the primary responsibility while allowing for experimentation and development of emerging forms of digital money.

According to HM Treasury, the change will apply to the central bank's oversight of payment infrastructure. The government plans to embed the mandate through amendments to the Financial Services and Markets Bill, which is set for further debate in the House of Lords on September 7 and 9.

Maksym Sakharov, co-founder and CEO of WeFi, noted that the annual reporting requirement could shift the balance toward greater public scrutiny. He pointed out that the innovation objective is secondary to financial stability but still requires the Bank of England to publish annual accounts of its work on payments innovation and digital money.

The proposal effectively broadens the Bank of England's remit beyond purely stability-focused oversight. It extends an existing regulatory approach applied to core market infrastructure to also incorporate a payments innovation goal. This means that payment systems using digital settlement assets, including stablecoins, will be covered by the new mandate.