The UK government plans to give the Bank of England a new secondary objective: supporting innovation in payment systems and in emerging forms of digital money. HM Treasury announced the change on August 27, 2026. It will apply to the Bank’s supervision of systemic payment systems, including those that settle in digital settlement assets such as stablecoins, and the Bank will have to report to Parliament on it every year.
The objective will be added through an amendment to the Financial Services and Markets Bill, which goes before the House of Lords in September 2026, with debates scheduled for September 7 and 9. “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,” said Lucy Rigby, the City minister.
The new goal ranks below financial stability
In the UK regulatory framework, a secondary objective is a goal an authority must pursue without ever putting it ahead of its primary objective. The hierarchy here is explicit. The innovation objective is subordinate to financial stability, and it does not require the Bank to support innovation that would undermine stability.
Its practical effect is procedural rather than substantive. It shifts the burden of argument: the supervisor will have to explain how its decisions take innovation into account. It also gives Parliament a new point of oversight, since the Bank must report every year on its progress against the objective.
- An additional goal, not a carve-out: the amendment itself relaxes no prudential regime.
- A duty to give reasons: innovation becomes one of the factors the Bank must weigh.
- An annual report to Parliament on progress made.
- A precedent: the same mechanism already applies to the Bank’s supervision of central counterparties and central securities depositories.
Stablecoin settlement falls within scope
The objective extends to the supervision of payment systems, including those that settle in digital settlement assets, a category in which HM Treasury explicitly includes stablecoins. Rigby also cited tokenization and distributed ledger technology. The Bank of England already supervises payment systems recognized for their systemic importance, and it is separately working on modernizing settlement in central bank money.
| Supervisory scope | Before | After the amendment |
|---|---|---|
| Central counterparties and central securities depositories | secondary innovation objective applies | unchanged |
| Systemic payment systems | does not apply | applies |
| Systems settling in digital assets, including stablecoins | does not apply | applies |
| Financial stability objective | primary | primary, and takes precedence in a conflict |
The move lands amid a broader payments overhaul
The announcement is part of the National Payments Vision unveiled in November 2024 in the Mansion House speech, which promised an overhaul of payments governance and support for open banking. The Payments Vision Delivery Committee, set up to implement it, published its strategy for retail payments infrastructure in late 2025.
The regulatory map is shifting at the same time. The Payment Systems Regulator (PSR) is being abolished and folded into the Financial Conduct Authority. David Geale, the PSR’s managing director, has said the abolition will not take effect before the first quarter of 2027.
What it means for market participants
- Stablecoin issuers targeting the UK: the Bank of England remains the supervisor for systemic activity, and it will now have to explain its assessments in light of innovation.
- Payment system operators: the annual report gives them a public reference point to cite in dealings with the supervisor.
- Banks: the ranking of objectives stands, and the amendment changes no prudential requirement.
- The market as a whole: the real timetable depends less on this amendment than on the FCA–PSR reorganization planned for 2027.
The closest comparison is the secondary competitiveness and growth objective given to the Financial Conduct Authority and the Prudential Regulation Authority in 2023. Three years on, the measurable effect of that provision lies mostly in the documentation the regulators produce and the benchmarks it gives Parliament. The 2026 amendment follows the same logic, applied to payments.