Bank of England to receive new objective to support payments innovation

The UK Government has proposed setting the Bank of England an objective of facilitating innovation in payments. The new objective will be secondary to the Bank’s primary financial stability objective.

A new secondary objective

The House of Lords has agreed to amend the Financial Services and Markets Bill 2026 to insert the objective into the Bank of England Act 1998. This change will require the Bank to facilitate innovation in payment systems and related services, including those using digital settlement assets, with a view to improving their quality, functionality and economy.

The Bank already has a secondary objective to facilitate innovation when regulating central counterparties and central securities depositories. The new objective extends this approach to its regulation of payment systems and digital settlement assets, such as stablecoins.

New accountability

The objective will start to apply after the Bill has passed through both Houses of Parliament and received Royal Assent, likely in 2027. The Bank will then report annually to HM Treasury on how it is advancing its secondary innovation objective for payment systems, as well as for CCPs and CSDs.

The amendment would also enable HMT to use remit letters to highlight aspects of the Government’s economic policy to which the Bank should have regard when considering how to advance the payments innovation objective. The Bank would be required to respond in writing.

Part of wider vision

This new objective should be seen in the light of the Government’s broader programme of reform for UK payments, including the National Payments Vision, and the more prominent regulatory role of the Bank over digital payments such as stablecoins. Firms subject to supervision should expect the Bank to more proactively weigh the impact of its policymaking on new technologies and business models.