The Bank of England has been given a new secondary objective by ministers to support innovation in payment systems and new forms of digital currencies. This new objective will operate alongside its primary goal of financial stability.
City Minister Lucy Rigby stated that while financial stability remains the Bank's main objective, this new goal will help the Bank drive innovation in payments and digital finance, aiming to maintain the UK's position as a leader in financial services.
The Treasury intends to implement these changes through amendments to the Financial Services and Markets Bill, which is scheduled for scrutiny in the House of Lords in September. The Bank will be required to report annually on its progress regarding this objective.
Labour came to power with a promise to overhaul the payments sector, with former Chancellor Rachel Reeves outlining her National Payments Vision in 2024. However, progress has been described as sluggish and has faced criticism.
The Payment Systems Regulator (PSR) was axed by Labour last March as part of efforts to drive growth. David Geale, managing director at the PSR, indicated earlier this year that the body's abolition would not formally occur until the first quarter of 2027 at the earliest.