The British Government has announced a new objective for the Bank of England (BoE), which will require it to support innovation in the UK’s payments systems.

The secondary payments innovation objective will direct the BoE to keep up with developments in the payments technology sector

Under the objective, the BoE will be required to provide parliament with annual reports on how it is advancing innovation.

The government said the BoE’s existing innovation requirements cover central counterparties and securities depositories and that this will be extended to of payment systems, including its approach to digital assets such as stablecoins.

In May, the BoE announced it would soften planned restrictions on stablecoins, stepping back from proposed rules including a holdings limit of £20,000 per stablecoin for individuals and £10 million for businesses.

At the time, deputy governor Sarah Breeden told the Financial Times that the BoE wants to promote the success of stablecoins, while ensuring they are a safe currency option.

City Minister Lucy Rigby said: “Developments in digital payments technology, including tokenisation and DLT, have the potential to transform financial markets across the globe.

“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.”

The government aims to apply the new objective via amendments to the Financial Services and Markets Bill, due to be debated on 7 and 9 September in the House of Lords.

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