The government has announced a package of measures designed to boost fintech.
The measures are aimed at helping the the UK remain at the cutting edge by promoting innovation and trust within the payments sector to drive growth. This involves delivering a more agile and streamlined regulatory framework and ensuring regulation can keep pace with rapid technological change whilst maintaining strong consumer protections.
The government has set out further detail on how the government intends to modernise payment services regulation and update it to support new innovations in money and payments, ahead of soon publishing a consultation inviting the payments sector to feedback. This will include improving the regulation of payment services and electronic money by integrating it with the UK’s core regulatory approach for financial services. This will mean establishing a single, coherent framework for both traditional and tokenised payments, including both stablecoins and tokenised deposits.
It will also include regulating stablecoins for their use in payments, where these stablecoins have been issued under the forthcoming new regulated activity for stablecoin issuance in the UK.
The government will also explore how the regulation of of payments services should adapt to payments conducted by AI agents.
The FCA will be given new powers to regulate the future of Open Banking that will include underpinning the development of new Open Banking payments within commercial schemes.
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."
