UK new package of reforms to boost innovation and modernise the payments sector

HM Treasury has announced a package of reforms aimed at modernising the UK payments regulatory framework to support innovation while maintaining consumer protection. The government confirms that it will shortly consult on reforms which include:

• Integrating the regulation of payment services and electronic money into the UK's core financial services framework, creating a single regime covering both traditional and tokenised payments (including stablecoins and tokenised deposits).
• Regulating stablecoins used for payments under a new UK regulated activity, alongside legislation to reduce administrative burdens for stablecoin payment providers.
• Adapting payments regulation to address payments conducted by AI agents.
• Granting the FCA new powers to oversee the future development of open banking and commercial open banking payment schemes.
• Streamlining regulation by setting out the government's response to consolidating the UK Payments Systems Regulator within the UK Financial Conduct Authority.
• Appointing a Wholesale Digital Markets Champion to support the development of tokenised wholesale markets as part of the government's wholesale financial markets digital strategy.

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