The UK government plans to give the Bank of England a new secondary objective focused on supporting innovation in digital money and payment systems, including stablecoins.
The proposed mandate is intended to help the UK keep pace with developments in digital finance while maintaining financial stability as the central bank’s primary responsibility. The government said the change would encourage innovation across payments and digital financial services.
The new objective is expected to be introduced through an amendment to the Financial Services and Markets Bill. The legislation is scheduled for further debate in the House of Lords in September, according to reports.
Under the proposed framework, the Bank of England would be required to consider how its policies can support technological development in payment systems and digital forms of money. The central bank would also report annually on its progress toward the new objective.
The move comes as stablecoins and tokenized assets become a growing part of the global financial sector. Stablecoins are digital assets designed to maintain a stable value against assets such as national currencies and are increasingly being explored for payments and financial settlement.
The Bank of England has already been developing a regulatory framework for sterling-denominated systemic stablecoins. Under its proposed regime, systemic stablecoins that become widely used for payments would be regulated jointly by the Bank of England and the Financial Conduct Authority.
The central bank has said stablecoins could provide faster and more flexible payment services, while also stressing the need for safeguards around financial stability and consumer protection.
The UK government’s latest move also follows changes in the Bank of England’s approach to stablecoin regulation. In June, the central bank published proposed rules for systemic sterling stablecoins as it seeks to establish a framework that supports innovation while maintaining confidence in digital forms of money.
The Bank of England has also identified systemic stablecoins, tokenized collateral and the Digital Securities Sandbox among its key areas of innovation for 2026.
Sarah Breeden, the Bank of England’s deputy governor for financial stability, said the new objective would further support the central bank’s existing work on innovation in financial services and payments.
The proposed mandate is part of a broader effort by UK authorities to establish clearer rules for digital assets while encouraging financial institutions to adopt blockchain and tokenization technologies.
If implemented, the new objective would give innovation a formal place alongside the Bank of England’s existing responsibilities. However, financial stability would remain the central bank’s primary objective under the proposed framework.
The move could also strengthen the UK’s position in the global competition to develop regulated stablecoin and digital payment markets as financial institutions increasingly explore blockchain-based infrastructure.
