The UK government has announced a broad package of measures aimed at future-proofing the country’s payments sector, unveiled during FinTech Week in London.
The package is designed to keep the UK competitive by fostering innovation and trust within the payments industry, with a focus on creating a more responsive regulatory environment that can adapt to rapid technological development without weakening consumer protections.
Among the headline announcements is a plan to modernise payment services regulation, with a consultation set to be published shortly inviting industry feedback. Central to this is the creation of a single, unified framework covering both traditional and tokenised payments — encompassing stablecoins and tokenised deposits. The package also includes steps to regulate stablecoins used in payments where they have been issued under a forthcoming regulated activity for stablecoin issuance in the UK, as well as an exploration of how payment services regulation should evolve to account for payments made by AI agents. New powers will be granted to the Financial Conduct Authority (FCA) to oversee the next phase of Open Banking, including supporting the development of new Open Banking payment products within commercial schemes. Legislation is also being brought forward to reduce administrative burdens for firms looking to offer stablecoin payment services.
Chris Woolard CBE has been appointed as the government’s new Wholesale Digital Markets Champion. Woolard, a partner at EY and former interim CEO of the FCA, will lead efforts to build a more efficient and competitive financial sector through the development of a tokenised wholesale financial markets system. Separately, the Centre for Finance, Innovation and Technology (CFIT) will receive an additional £1m in funding from April, supporting its ongoing work facilitating collaboration across the FinTech sector. The government has also set out its response to a prior consultation on folding the Payments Systems Regulator (PSR) into the FCA, a move intended to streamline oversight.
City Minister and Economic Secretary to the Treasury Lucy Rigby is attending FinTech Week events to promote the government’s ambitions for the UK to remain the leading destination for FinTech firms to start, grow and succeed. The UK’s FinTech ecosystem benefits from the country’s broader financial services strengths, including a large start-up community, the presence of global banks and insurers, leading academic institutions, and a regulator known for early engagement with innovation.
Economic Secretary to the Treasury Lucy Rigby said, “Fintech is true British success story, and we are backing the industry to maintain its competitive edge and go even further and faster in driving growth. Today’s package is our latest stake in the ground as we build a payments ecosystem that is secure, competitive and fully equipped to harness the opportunities created by rapid technological change. I also welcome our new Wholesale Digital Markets Champion, Chris Woolard CBE, who will help the government drive tokenisation in our markets – a critical shift for the next ‘digital big bang’ for the UK sector.”
Wholesale Digital Markets Champion Chris Woolard CBE said, “It’s an honour to be appointed Digital Markets Champion for the UK’s Wholesale Financial Markets Digital Strategy. As financial markets increasingly move away from manual processes to digital, tokenised systems, collaboration and an open two-way dialogue between the private and public sectors will best support the Strategy’s success, and will ultimately enhance the UK’s global competitiveness as a leader in digital markets.”
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