The UK government has moved to give the Bank of England a new formal duty to foster innovation in payment systems and new types of digital money, while keeping financial stability as its overriding priority. Announced on 27 August 2026, the change is intended to help regulation keep up with fast-moving technology and to create a more supportive environment for new payment methods to develop safely.
The additional objective will sit below the Bank’s primary mandate to protect and enhance financial stability.
Officials say it will not require the Bank to promote any innovation that could threaten that core goal.
The Bank will have to report to Parliament each year on how it is advancing the innovation objective, providing a public measure of whether the regulatory approach is keeping pace with technological change.
City Minister Lucy Rigby said advances in digital payments, including tokenisation and distributed ledger technology, could reshape financial markets worldwide.
She added that while financial stability remains the Bank’s first responsibility, the new secondary objective would help the institution continue encouraging innovation in payments and digital finance so that the UK stays a leading financial centre.
Bank of England Deputy Governor Sarah Breeden welcomed the decision.
She said it would strengthen existing work with government and other authorities to maintain public confidence while supporting innovation in UK payments.
The Bank already holds a similar secondary innovation objective when supervising central counterparties and central securities depositories; the latest proposal extends that approach to systemic payment systems, including those that use digital settlement assets such as stablecoins.
The government stressed that the Bank already oversees critical market infrastructure, including the most important payment systems.
The planned change forms part of a wider program, developed with the Bank and other regulators, to modernise the UK payments landscape, accommodate new technologies and business models, and keep the country an attractive place to build and scale financial services firms.
Ministers linked the move to a broader effort to give businesses greater confidence to invest and innovate.
The government plans to introduce the new duty by amending the Financial Services and Markets Bill, which is scheduled for debate in the House of Lords on 7 and 9 September 2026.
Once in place, the secondary objective will apply only where it does not conflict with financial stability.
The announcement comes as the UK continues work on next-generation retail payments infrastructure, wholesale settlement upgrades, and frameworks for tokenised assets and stablecoins. By placing an explicit innovation duty on the Bank’s supervision of payment systems, ministers aim to ensure the regulatory system itself becomes a platform for responsible growth rather than a constraint.