The UK Treasury has stepped up pressure on the Bank of England to accelerate innovation across payment systems and digital currencies.
HM Treasury plans to introduce a statutory secondary objective that will require the central bank to place greater focus on innovation. The move signals growing government concern about the pace of payments modernisation in the UK.
The Bank of England traditionally focuses on financial stability and monetary policy. However, ministers now want the central bank to consider innovation more directly when developing payment systems and digital currency frameworks.
Industry leaders have described the decision as a significant signal from the government. They say it reflects concerns about the Bank of England’s cautious approach to financial technology.
The intervention comes as the UK works to implement its National Payments Vision. The strategy aims to strengthen the country’s payment infrastructure and maintain its position as a leading global financial centre.
However, progress on several areas has faced delays. These include digital assets, tokenisation and sterling-denominated systemic stablecoins.
Fintech firms have also raised concerns about regulatory barriers. Innovate Finance has previously warned that overly restrictive rules could weaken London’s position in the global digital finance market.
The new statutory objective could give fintech companies and financial institutions more influence over the regulatory process. It could also encourage the Bank of England to balance financial stability with technological development.
The changes could affect businesses that rely on faster payments and advanced financial technology. Faster settlement systems could help companies manage cash flow and working capital more efficiently.
Real-time payments could also reduce transaction delays and improve cross-border financial operations. Meanwhile, developments in tokenised deposits and digital currencies could create new options for corporate treasury teams.
The government also wants the UK to compete with financial centres across Europe, Asia and the Middle East. Several international markets have already developed clearer frameworks for digital assets and stablecoins.
For UK financial firms, faster regulatory progress could therefore help prevent investment and transaction activity from moving overseas.
The Treasury’s intervention sends a clear message about the future of UK finance. Ministers want the Bank of England to support innovation while maintaining its core responsibility for financial stability.
The success of the new objective will depend on how quickly the central bank turns the policy change into practical reforms. For now, the government has made its expectations clear: the UK wants faster progress in payments and digital finance.
