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The announcement of a package of measures intended to boost the UK’s competitive edge and modernise its payments services regulation offers limited novelty, but represents further evolution of the country’s regulatory environment.
In its statement, issued during Fintech Week in London, the government said that its goal is to build a “more agile and streamlined regulatory framework” and ensure that regulation can “keep pace with rapid technological change whilst maintaining strong consumer protections”.
One notable measure is the appointment of Chris Woolard CBE, a partner at EY and former interim CEO of the Financial Conduct Authority (FCA), as wholesale digital markets champion. He will have responsibility for driving the adoption of tokenised digital assets, meaning financial assets represented as digital tokens on a blockchain.
In addition, the government is aiming to improve the regulation of payment services and electronic money by integrating it with the UK’s core regulatory approach for financial services, establishing a single, coherent framework for traditional and tokenised payments, including both stablecoins and tokenised deposits.
Charlotte Hill, a partner at Charles Russell Speechlys LLP, told Vixio that “bringing payment services, e-money and wider financial services regulation into a single framework is both sensible and overdue. The current regime is fragmented and too slow to adapt when new forms of money or payment emerge”.
The announcement also noted that the FCA will be handed new powers to regulate the future of open banking, including the development of new open banking payments within commercial schemes.
In a step that recognises the rapid advances in the use of artificial intelligence in retail payments, the government plans to explore the regulation of payments conducted by AI agents. This will mean examining questions of authority and consent, liability, and governance and safeguards, and may ultimately require the creation of a specific regulatory framework.
Finally, the government stated that it would share its response to the consultation on plans to bring the Payments Systems Regulator (PSR) into the FCA, which it has since done.
The economic secretary to the Treasury, Lucy Rigby, said that the package is part of the government’s drive to “build a payments ecosystem that is secure, competitive and fully equipped to harness the opportunities created by rapid technological change”.
Implementing the NPV
As covered by Vixio, promoting competition, innovation and growth in key areas such as open banking and open finance, stablecoin regulation and agentic AI were all part of the FCA’s Payments Priorities, published in March 2026.
Similarly, the open finance roadmap sets out the regulator’s consumer-first approach to the evolution of open banking, which aims to maximise value for consumers and support businesses in their product development.
The FCA’s recent consultation on the regulatory framework for cryptoassets, meanwhile, adds granularity to its plans, aiming to avoid edge cases and provide clarity for affected entities.
The proposal includes changes to the Perimeter Guidance Manual (PERG) within the FCA Handbook, aiming to provide guidance on the circumstances in which authorisation is required, and on the activities that are regulated under the act.
The Fintech Week announcements are part of the growing impact of the UK’s National Payments Vision (NPV), introduced in November 2024 and designed to create a “trusted, world-leading payments ecosystem delivered on next-generation technology” in the UK.
By modernising the country’s payments regulatory landscape, the government and regulators hope to ensure that consumers and businesses have a choice of payment methods to meet their needs securely and safely.
Open banking and open finance were a key part of the NPV, and the FCA has already collaborated with industry to establish the Future Entity and with HM Treasury to establish a long-term regulatory framework.
Championing tokenisation
A key theme in UK payments regulation at the moment is the move from theory into practice – the authorities are acknowledging that new technologies and payment methods require adaptation and evolution in supervision.
For example, the appointment of Woolard as wholesale digital markets champion signals that the government is moving beyond just thinking about tokenisation. He will be expected to drive the adoption of tokenised digital assets in wholesale markets, providing a central point of contact for the industry to bridge the gap between private innovation and regulatory sandbox testing.
As Hill noted, “The UK does not lack tokenisation projects; it lacks coordination. A wholesale digital markets champion could help turn years of pilots and policy papers into real commercial adoption.”
Woolard is described as having good relationships with regulators and industry, which is a positive factor, and he should be well placed to drive adoption of tokenisation if given the necessary flexibility.
Although the brief is wholesale, the industry will be looking for signals on how these institutional digital assets will interoperate with the retail stablecoin and tokenised deposit frameworks also mentioned in the package.
A slate of consultations
The government intends to consult on the more notable areas covered by its announcement: reforming the regulation of payment services and electronic money, supporting tokenised payments and stablecoins, developing open banking, and supervising AI agents as they conduct payments on behalf of consumers and businesses.
For affected payment service providers (PSPs), e-money institutions (EMIs) and other fintech players, participating in these consultations should be a priority. The FCA and the government are beginning to demonstrate where their priorities lie, so it is important that industry contributes to the conversation.
The single regulatory framework that merges traditional payment services and e-money with tokenised payments and stablecoins also represents an evolution in policy: stablecoin regulation was previously discussed largely as a “bolt-on” to existing rules, loosely covered by conversations around the wider cryptoasset regime.
The upcoming consultation will detail how the UK will manage both traditional and on-chain payments together, reducing the friction firms currently face.
To adapt effectively to advancing technology, HM Treasury and the FCA will need to create a flexible, outcomes-based framework that is not reliant on highly prescriptive legislation that becomes outdated quickly. They must also avoid over-complicating regulation for smaller PSPs and EMIs.
The development of a single framework could signal the phasing out of the standalone E-Money Directive (EMD) and Payment Services Directive (PSD) legacy in favour of a unified UK FSMA-style authorisation regime, which would be huge for PSPs and EMIs.
The exploration of how to regulate AI agents, meanwhile, is an attempt to tackle the complex questions of liability and authentication requirements for agentic finance, where an AI might negotiate and pay for a service without a human clicking “buy”.
According to Hill, “The key question is not whether an AI agent can make a payment, but who is responsible when it gets one wrong.”
Regulation 67 of the Payment Services Regulations (PSRs) 2017 requires the user to give consent for each transaction, but AI agents bypass this manual step. Regulators will need to resolve this issue, perhaps via a delegated authority model where a user pre-authorises an AI within specific parameters.
This is set to be an area of great importance for UK consumers and businesses, particularly in determining how existing consumer protection regulations apply to emerging technology. It is vital that the regulators develop robust policies; however, they will need input from industry stakeholders to ensure that the regulatory framework is proportional and effective.
By giving the FCA powers to regulate the future of open banking, meanwhile, the government is potentially creating a legal basis for banks and third-party providers (TPPs) to charge for premium APIs. This would present significant commercial opportunities and would be a boost to the long-term growth of variable recurring payments (VRPs).
Again, industry feedback will be vital, so organisations operating in this area should prioritise participating in the upcoming consultations.
The government has shown flexibility when it comes to addressing industry concerns. For example, the draft statutory instrument (SI) regarding provisions to amend the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 removes stablecoin payments from scope of authorisation, which is an industry-driven ask.
This move demonstrates how authorities are able to amend legislation based on feedback on the use cases of such technology, in this instance accepting that stablecoins fit better within payments than cryptoassets.
Although much of the rhetoric in the announcement is relatively standard, the appointment of Woolard, the additional detail on open banking and the attempt to address the regulation of AI agentic payments will help move the UK’s regulatory roadmap forward.
