The UK government has used Fintech Week in London to announce a comprehensive package of measures designed to modernise payment services regulation and reinforce the country's position as a global fintech hub. In a statement from HM Treasury, officials declared an intention to update the regulatory framework to better support innovations in money and payments, while also publishing a formal consultation to gather feedback from the payments sector.
Lucy Rigby, economic secretary to HM Treasury, described fintech as “a true British success story” and said the government is “backing the industry to maintain its competitive edge and go even further and faster in driving growth.” Rigby attended several events during Fintech Week to promote the government’s ongoing efforts to keep the UK as the leading destination for fintech firms to start, scale, and succeed.
The announcement comes at a critical time for the UK fintech sector. Britain is second only to the United States in global fintech investment rankings, with more than 3,000 fintech firms operating across the country, supporting tens of thousands of jobs. However, fintech investment in the UK fell to its lowest level since 2020 in 2025, underscoring the need for renewed policy support. One notable bright spot is Revolut, the UK-headquartered digital bank, which saw its valuation jump by £23bn last year to reach £57bn, prompting Chris Skinner, CEO of The Finanser, to call it Britain’s “leading technology company.”
The package of measures includes several structural and regulatory changes. The government will bring the Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA), consolidating oversight and aiming for a more coherent regulatory approach. It will also lay out a single framework that covers both traditional and tokenised payments, addressing the growing convergence of conventional and digital asset-based financial services. Additionally, the government will set guidelines on how payment service regulation should respond to AI agents conducting purchases on behalf of customers and businesses, recognising the rapid adoption of AI in finance. On stablecoins, the plan includes regulating their use while simultaneously cutting administrative burdens for companies that want to provide stablecoin-based payment services.
Alongside these regulatory changes, the government announced an additional £1m in funding for the Centre for Finance, Innovation and Technology (CFIT) from April onwards. This funding will allow CFIT to continue its work facilitating collaboration across the fintech sector, bringing together industry, academia, and regulators to solve shared challenges.
Another key appointment is Chris Woolard CBE as the wholesale digital market’s champion. Woolard praised the UK’s investment environment, noting “a thriving startup ecosystem, global banks and insurers, and leading universities,” as well as regulators who adapt to innovation, allowing firms to “test, learn and scale responsibly.” He called for open dialogue between the private and public sectors to build a tokenised wholesale financial markets ecosystem, and the government’s forthcoming consultation is expected to seek input on this very topic.
This initiative builds on earlier steps the UK has taken to cement its fintech leadership. A few months ago, the government established a regulatory regime for crypto assets to compete globally. Recently, the FCA outlined its open finance plan for 2030, a roadmap aimed at giving consumers and businesses more control over their financial data. Together, these moves signal a sustained commitment to adapting the UK’s financial services framework to technological change.
Phil Belamant, co-founder and CEO of Zilch, welcomed the announcements, stating: “The UK has a real opportunity to lead globally in enabling agentic finance, helping consumers benefit from smarter, more efficient ways to manage their money.” Industry observers expect the consultation process to generate significant input from both established financial institutions and emerging fintech startups, as the government seeks to balance innovation with consumer protection and financial stability.
The UK fintech sector has long been a driver of economic growth, with firms ranging from digital banks and payment platforms to insurtech and regtech companies. The government’s latest package aims to address regulatory fragmentation, support emerging technologies like AI and tokenisation, and ensure that the UK remains an attractive destination for investment and talent. With the integration of the PSR into the FCA, the creation of unified payment frameworks, and a focus on stablecoins and AI agents, the UK is positioning itself to lead the next wave of financial innovation.
Source: ComputerWeekly.com News