The Financial Services Growth and Competitiveness Strategy sets out an ambitious roadmap for modernising payments infrastructure and supporting digital innovation.
The UK government will develop a new Payments Forward Plan as part of its Financial Services Growth and Competitiveness Strategy 2035, outlining how the country’s payments infrastructure will evolve over the next decade.
The strategy, published ahead of Chancellor Rachel Reeves’ Mansion House speech this evening (July 15), places payments modernisation at the centre of efforts to enhance the UK’s financial competitiveness.
Designed to align with broader innovation and capital markets reform, the strategy outlines a multi-phase vision that includes regulatory streamlining, infrastructure upgrades and new legal frameworks for stablecoins and digital identity.
Infrastructure overhaul led by Bank of England and industry
The centrepiece of the plan is a commitment to modernise the UK’s retail and wholesale payment infrastructure. A new roadmap — the Payments Forward Plan — will be developed in coordination with public authorities and industry, building on the Bank of England’s ongoing upgrades to the real-time gross settlement (RTGS) system.
Key features include:
- Near 24/7 RTGS operation to support real-time availability
- Synchronisation functionality allowing settlement alongside distributed ledger technology (DLT) platforms
- Support for tokenised payments and digital settlement models
The UK will also continue its participation in Project Agorá, an international collaboration to enhance cross-border payments through interoperable digital money and shared standards.
These changes are intended to future-proof the country’s core payments infrastructure and respond to global developments in programmable and tokenised financial instruments.
Stablecoins and digital money: clarity promised, gaps remain
The government will legislate for the regulation of fiat-backed stablecoins used in payments and wholesale settlement, creating a framework to authorise issuers, manage safeguarding, and support market confidence.
The move follows similar action by the EU and US and aims to maintain the UK’s competitiveness in digital asset infrastructure.
However, some stakeholders argue the strategy does not go far enough on broader cryptoasset investment products.
“While the Chancellor occupies herself with tweaks to the country’s financial plumbing, investment cryptoassets — and the very real existing consumer demand to access them — have been studiously ignored,” said Nick Jones, Founder and CEO of Zumo.
“It’s quite the contrast to the US, where there is a real buzz around ‘Crypto Week’, with a number of important digital asset laws set to be voted on. UK consumers are crying out for regulated access to quality cryptoasset investment opportunities, with UK cryptoasset ownership rates already among some of the highest in the world.”
“Businesses respond to speed, clarity and a clear commercial route to market. With jurisdictions worldwide striding ahead in the crypto race, now is surely the time to capitalise on a resurgent retail market and show the world that the UK is open for crypto business.”
While the BoE continues to explore a digital pound, the near-term focus remains on regulated, fiat-linked instruments such as stablecoins and tokenised deposits.
PSR–FCA integration now operational
Although not announced in this week’s strategy, the PSR’s recent merger into the Financial Conduct Authority (FCA) frames the broader direction of travel. The integration was confirmed in May, with FCA Executive Director David Geale taking over leadership of the PSR.
The merger, part of the government’s drive to reduce regulatory duplication, has prompted debate about the future of payments oversight. While some argue the move brings consistency, others warn it could dilute focus on issues such as infrastructure access, APP fraud, and competition in emerging payment models.
The strategy reiterates the government’s intention to consult on future changes to the payments regulatory framework, in line with the broader Payments Forward Plan.
Supporting innovation and fraud prevention
The strategy also addresses financial crime and compliance. Through the forthcoming Data (Use and Access) Act 2025, the government will legislate to support the use of digital identity for AML checks, with a particular emphasis on reusable ID solutions to streamline customer onboarding.
This is expected to reduce duplication and friction for payments firms, especially in sectors with high customer turnover or cross-border operations.
The Financial Services Growth and Competitiveness Strategy 2035 outlines a comprehensive vision for payments. But delivery timelines remain vague, and implementation will require close coordination between regulators, infrastructure providers and the private sector.
As Chancellor Rachel Reeves takes the stage at Mansion House this evening, the payments industry will be watching for further detail, and for reassurance that the UK’s ambition in digital finance is matched by regulatory clarity and operational follow-through.
