News

Economic secretary announces new measures to boost the UK’s competitiveness in payments and digital markets

22 April 2026

As has become customary for the keynote slot at the Innovate Finance Global Summit, the Government used the occasion to make a significant announcement on its plans and vision for the future of fintech in the UK—and this year was no different. On 21 April 2026, Economic Secretary to the Treasury Lucy Rigby set out plans to position the UK as the leading destination for fintechs to start, scale and succeed, with a number of measures targeting payments, stablecoins and digital finance more broadly.

Payments regulation brought within FSMA

One of the most significant announcements was that payment services and electronic money will be integrated within the Financial Services and Markets Act 2000. This represents a fundamental shift in how payments regulation is approached in the UK, bringing it into alignment with the broader financial services regulatory architecture. The intention is to establish a single, coherent framework for both traditional and tokenised payments—including stablecoins and tokenised deposits.

Regulating stablecoins for use in payments

After much anticipation, the Government has confirmed its intention to regulate stablecoins used for payments purposes, where these stablecoins have been issued under the new regulated activity for stablecoin issuance in the UK. This comes after considerable debate on how the UK will overcome the dual authorisation issues that surfaced in the EU, and has been followed up with an amendment to the draft statutory instrument removing arranging and dealing in qualifying stablecoins as a regulated activity.

Use of AI in Payments

The Economic Secretary also addressed the emerging area of agentic commerce. Whilst still nascent, it is clearly on the Government's radar, and officials are considering how the regulatory framework may need to adapt to accommodate AI-driven financial activity—in particular, payments conducted by AI agents. This positions the UK at the forefront of thinking on how artificial intelligence intersects with payments and financial services.

New FCA powers for open banking

The FCA will receive new powers to regulate the future of open banking, including underpinning the development of new open banking payments within commercial schemes. The FCA's enhanced role should provide greater consistency in how open banking evolves and offer a clearer framework for innovation.

Appointment of a wholesale digital markets champion

For some time, there have been calls from industry for the UK to appoint someone to drive digital asset adoption forward, and the announcement of Chris Woolard CBE as the Government's new Wholesale Digital Markets Champion will certainly be welcome. He will lead the Government's work to deliver a more efficient and competitive financial sector by building a tokenised wholesale financial markets system. His appointment indicates that the Government is serious about driving forward the digitisation of capital markets, with a senior figure dedicated to removing barriers and promoting innovation in this space.

PSR to be brought within the FCA

The Government has set out its response to its consultation on bringing the Payment Systems Regulator within the Financial Conduct Authority. This consolidation will create a more efficient and coherent regulatory framework and streamline regulatory engagement. Whilst the response noted that the Government's proposals were welcomed by respondents, it was highlighted that legislative intervention alone will not address this issue and success will be dependent on the actions of the FCA.

Additional funding for CFIT

Alongside the regulatory reforms, the Government announced an additional £1 million in funding for the Centre for Finance, Innovation and Technology (CFIT) from April. This funding will enable CFIT to continue its work facilitating collaboration and solving pressing issues across the fintech sector.

What does this mean?

The announcement signals clear intent from the Government. The reforms look to position the UK as the leading jurisdiction for fintech and address core issues such as the country's payment infrastructure and the creation of a coherent regulatory framework for both stablecoins and tokenised deposits—vital for the advancement of the sector. This is perhaps one of the clearest signals that the UK sees digital assets converging with the traditional financial services space, and should be a positive development for the industry.

It has been clear for some time that the UK sees the biggest prize as lying in wholesale digital markets, and having Chris Woolard as its Champion promises to deliver on that ambition. Piecing together the reforms, this appointment is only the beginning—there will be more to come.

The reference to agentic payments is also one to watch. Whilst nascent, this area is growing at pace, and the Government's willingness to engage early suggests an intent to better understand the landscape and deliver regulatory clarity.

What are the next steps?

The announcements will require primary and secondary legislation to implement fully. Firms should expect consultation papers from HM Treasury and the FCA in the coming months setting out the detail of how these reforms will be operationalised. The timeline for implementation remains to be seen, though it is clear from the EST's speech that there is considerable momentum behind these proposals.

Authored by Lavan Thasarathakumar.