HM Treasury plans to give the Bank of England a new secondary objective to support innovation in payment systems and digital money

HM Treasury announced on 27 August 2026 that the government intends to legislate a new secondary objective for the Bank of England, requiring it to support innovation in payment systems and emerging forms of digital money, including those using digital settlement assets such as stablecoins and technologies built on tokenisation and distributed ledger technology (DLT, the infrastructure that underpins blockchain-style systems). The innovation objective will sit below the Bank's existing primary objective of protecting and enhancing UK financial stability, meaning the Bank will not be required to support innovation where doing so would compromise stability. The Bank will report annually to Parliament on how it is advancing the new objective, creating a public accountability mechanism. The government intends to implement the change through amendments to the Financial Services and Markets Bill, which is next scheduled for debate in the House of Lords on 7 and 9 September 2026. The reform extends an approach already in place for the Bank's regulation of central counterparties (CCPs, clearing houses that sit between buyers and sellers to reduce counterparty risk) and central securities depositories (CSDs), where a secondary innovation objective was introduced through the Financial Services and Markets Act 2023. City Minister Lucy Rigby KC MP framed the move as part of a broader programme to keep the UK a global leader in financial services, while Bank of England Deputy Governor for Financial Stability Sarah Breeden welcomed it as reinforcing existing work on payments modernisation. The announcement sits within a wider government programme to modernise the UK payments landscape and support new business models in digital finance.

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