UK moves to make Bank of England champion payments innovation
The UK Treasury plans a new secondary objective for the Bank of England to foster innovation in payments and digital money like stablecoins, with annual reporting to parliament.
The British government has unveiled plans to give the Bank of England a new secondary mandate focused on supporting innovation in payment systems and digital money, including stablecoins. The Treasury confirmed the move on Wednesday, stating that financial stability will remain the central bank's primary responsibility.
Stablecoins — crypto tokens designed to hold a steady value — have seen rapid growth in recent years, particularly amid the crypto-friendly policies of the Trump administration. They are used both in crypto trading and increasingly for everyday payments.
The proposed objective is designed to ensure regulation keeps pace with evolving payments technology. Under the plan, the Bank would be required to report annually to parliament on its progress in advancing the innovation goal.
Bank of England Deputy Governor Sarah Breeden welcomed the announcement. City Minister Lucy Rigby said developments in digital payments, including tokenization, had the potential to transform financial markets.
"Whilst financial stability will always remain the Bank's primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services," Rigby said.
The move follows the financial regulator's June decision to reduce planned capital requirements for stablecoin issuers after industry pushback, as it brought the cryptoasset sector fully within its remit for the first time.
Prime Minister Andy Burnham's government plans to maintain its predecessor's pro-growth approach to financial services regulation, with Finance Minister John Healey retaining several Treasury ministers from the previous administration.