The UK government plans to give the Bank of England a new secondary objective to support innovation in payment systems and emerging forms of digital money, including stablecoins, through an amendment to the Financial Services and Markets Bill. HM Treasury says the amendment is next due for debate in the House of Lords on 7 and 9 September, though the bill’s own page on Parliament’s website didn’t list those dates as of this pass.
HM Treasury said on 27 August 2026 that the proposed objective would sit beneath the Bank’s existing primary objective of financial stability. The change wouldn’t take effect unless the amendment completes the parliamentary process and is passed into law.
Extending a model already used for market infrastructure
The proposal would extend an existing Bank of England model rather than create an entirely new type of objective. The Bank already has a secondary objective to facilitate innovation in its regulation of central counterparties and central securities depositories. HM Treasury’s release says the same approach would apply to its regulation of payment systems, “including those using digital settlement assets, such as stablecoins.”
“Developments in digital payments technology, including tokenisation and DLT, have the potential to transform financial markets across the globe,” said Lucy Rigby, City Minister. “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.”
Sarah Breeden, deputy governor for financial stability at the Bank of England, welcomed the change. “We welcome today’s announcement, which will further boost our work to support innovation in financial services without compromising on financial stability,” she said. “The Bank is doing a huge amount, together with government and other authorities, to maintain trust and drive innovation in UK payments. This new secondary objective will further support that.”
Industry reaction
Emma Banymandhub, chief executive of The Payments Association, the trade body for the UK payments industry, welcomed the objective as a shift in how the Bank approaches its role. “The Bank of England can work as navigators, not backseat drivers – a welcome change we have been a huge advocate for,” she said.
Banymandhub said stablecoins had moved beyond “speculative novelty” and argued that the UK needed an internationally competitive stablecoin framework to keep pace with the EU, US and Asia.
Richard Baker, founder and chief executive of Tokenovate, a firm that builds software to automate post-trade and collateral processes for financial institutions, also welcomed the objective, focusing his comment on modernising the market infrastructure that sits behind any tokenised asset once it trades. Tokenovate works in the post-trade and tokenisation market, giving the company a commercial interest in the policy direction.
“Tokenisation and distributed ledger technology have the potential to improve how assets, collateral and cash move through markets, but the biggest, perhaps most tangible, benefits will develop from modernising the post-trade processes around them,” he said. He added that for regulated institutions, that means “greater automation, interoperability and legal certainty, with programmable settlement able to work alongside existing market infrastructure.”
The proposed objective would sit alongside the Bank’s existing work on systemic stablecoins. The Bank published draft rules for sterling-denominated systemic stablecoin issuers in June 2026 and said it intends to finalise that Code of Practice by the end of the year, ahead of regulated stablecoins operating in the UK from 2027.
The amendment’s next stated parliamentary test is in the House of Lords on 7 and 9 September, according to HM Treasury; any change to the Bank’s objectives would take effect only once the amendment completes the parliamentary process.
