The UK Government has announced a package of new measures to boost innovation and modernise regulation for the country’s payments sector.

Aiming to preserve Britain’s competitive edge in payments, the plans will support the government’s wider Financial Services Strategy by bringing payment services and e‑money regulation under the UK’s main financial‑services regime, establishing a single framework for both traditional and tokenised payments, including stablecoins.

The proposals, which the government said it will soon open consultation on, also include regulating qualified stablecoins for use in payments and exploring how the regulation of payment services should adapt to payments conducted by AI agents, a fast-emerging field.

The government said it also wants to provide the FCA with new powers to regulate the future of Open Banking, which will include underpinning the development of new Open Banking payments within commercial schemes, and will look to bring forward legislation to cut red tape for firms wanting to provide stablecoin payments.

“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,” said Lucy Rigby, economic secretary to the Treasury.

“Fintech is a true British success story, and we are backing the industry to maintain its competitive edge and go even further and faster in driving growth.”

An additional £1 million in funding will also go to the Centre for Finance, Innovation and Technology (CFIT) to fund its work facilitating collaboration across the UK’s fintech sector, which attracted over £2.6 billion in investment last year, second only to the US.

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The new measures will also see the appointment of Chris Woolard CBE, former interim CEO of the FCA, as the government’s new Wholesale Digital Markets Champion, where he will take the lead on working to build the UK’s competitiveness in digital assets by building a tokenised wholesale financial markets system.

“It’s an honour to be appointed Digital Markets Champion for the UK’s Wholesale Financial Markets Digital Strategy,” said Woolard.

“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.”