The Treasury wants the Bank of England to care about payments innovation. That is the plain meaning of a new secondary objective announced this week, which asks the central bank to support the development of payment systems and digital money, stablecoins included, while keeping financial stability as its first duty.
The announcement came on 27 August from the government and City Minister Lucy Rigby, with the measure set to enter law through the Financial Services and Markets Bill, which reaches debate in the House of Lords in September. Reuters reported the plan a day earlier. The Bank has welcomed it. Sarah Breeden, the deputy governor for financial stability, said the new objective would further support work the institution is already doing with government and other authorities to maintain trust and drive innovation in UK payments.
There is a political subtext here that anyone covering City regulation can read. For years, British fintech founders and some Treasury types complained the Bank was too cautious on crypto and tokenised settlement, a central bank built for stability reflexively treating novelty as risk. The secondary objective is the government’s answer: not an instruction to embrace digital assets, the wording explicitly says the Bank will not have to support innovation where it would undermine financial stability, but a statutory nudge to stop treating them as radioactive. The Bank will have to report to parliament on its progress every year, which gives the complaint a place to go besides a conference keynote.
The Burnham government inherited this file rather than opened it. The previous administration consulted on stablecoin regulation and a digital securities sandbox; the new one has kept several Treasury ministers in place and, as Reuters noted, plans to maintain the pro-growth approach to financial services regulation under the new chancellor, John Healey. Rigby put the ambition in standard language: ensuring the UK remains a global leader in financial services while the technology, tokenisation specifically, transforms the way markets work.
Whether a secondary objective changes anything practical is the fair sceptical question. Objectives shape how regulators weigh decisions, and courts can test whether they were weighed. A payments firm refused a service by a Bank division could argue, in future, that the innovation duty was ignored. That is slow machinery. Faster effects tend to be tonal: staff numbers, dialogue with firms, willingness to pilot. The City’s supervisors already say they are stretched; the honest read is that a statutory duty without a budget line moves the needle on posture more than output.
For the payments industry the news will be read alongside the Bank’s own live files: the digital bond pilot that has tested tokenised settlement with real issuance, the operational contingency discussions on a potential digital reserve asset, and the steady growth of instant payment schemes outside the Bank’s direct control. None of those stop for legislation. But a bank that must annually explain its innovation record to parliament is a bank whose answers start to shape markets whether it intends to lead them or not.