As part of UK FinTech Week, the government announced a new package of measures designed to encourage innovation and adoption in the digital payments space.

The package involves plans to create a more streamlined regulatory framework, ensuring regulation can keep pace with rapid technological change without diluting consumer protections.

For example, the regulation of payment services and electronic money will be integrated with the UK’s core regulatory approach for financial services, with a single framework for traditional and tokenised payments.

Stablecoins will be regulated for use in payments, where they have been issued under the new regulated activity for stablecoin issuance in the UK. The Financial Conduct Authority (FCA) will also be given new powers to regulate open banking.

Legislation will be brought forward to cut administrative burdens for companies wanting to provide stablecoin payments.

ICAEW set up a Digital Asset Working Party (DAWP) in 2023 to look at the tax and accounting of implications of digital assets, including the accounting and taxation of stablecoins. 

Polly Tsang, Senior Financial Services Regulatory Manager explains: "Regulation has been moving at pace globally in this space, but accounting and tax remains under examined. Without clarifying the accounting and tax treatment there will not be mainstream adoption."

During UK FinTech Week, ICAEW convened its first closed-door roundtable on stablecoins with regulators, standard-setters, industry representatives and members of DAWP. Tsang confirms: "We are looking to continue these conversations to support UK's ambition to be a world leading destination for digital assets-with trust and safeguards."

Digital markets champion

One of the big announcements as part of the package is the appointment of Chris Woolard CBE, Partner at EY and former interim CEO of the FCA, as Wholesale Digital Markets Champion. Woolard is tasked with leading on the work to deliver a more efficient and competitive financial sector through building a tokenised financial markets system.

A short-term move from manual systems to digital, tokenised ones will create a new industry baseline, he told ICAEW Insights. “There are multiple opportunities and different use cases to focus digital progress on, from settlement of securities, to tokenisation of deposits, and improving how funds operate,” he says.

“The UK is already exploring many of these areas, but there is intense international competition, so ramping up the pace now will give the UK a greater competitive edge.”

Woolard believes the UK has a lot of knowledge and talent in relation to digital assets and tokenisation. He explains: “We have regulators and policymakers leaning into the issues, but we need even greater collaboration to meet the government's Wholesale Digital Markets Strategy. We need to ensure change happens – and fast enough to ensure the UK exercises global leadership.

He continues: “I am excited to get the right people together, to discuss, debate, and build a plan that can be put into motion to make real, tangible change.”

Woolard says that he’s excited about taking on the role. “It is such a critical area to progress,” he says. “What we do now will have a huge impact within financial services, and for the UK as it competes on the global stage. I look forward to connecting the right people, enabling powerful, actionable conversations, and to ultimately reporting back to the government and the market on what action has been taken and what more needs to be done to advance from manual to digital, tokenised systems.”

Other measures in the package

An additional £1m in funding will be allocated for the Centre for Finance, Innovation and Technology to continue the Centre’s work facilitating collaboration and solving pressing issues across the fintech sector.

The government will also set out its response to its consultation to bring the Payments Systems Regulator into the FCA. It will soon consult on how to reform the regulation of payment services and electronic money.

Currently, more than 3,000 fintech firms support tens of thousands of skilled jobs across the country, attracting £2.6bn in investment in 2025 - second only to the US.

Economic Secretary to the Treasury, Lucy Rigby, said: “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.” 

The UK has all the ingredients to be a global superpower in fintech, payments and capital markets, said Janine Hirt, CEO of Innovate Finance, by leading in open banking, digital assets and stablecoin, and agentic AI. She says: “Unleashing innovators and championing transformation in markets is critical. We look forward to mobilising industry to work with Chris Woolard, the government and regulators to drive this strategic ambition and deliver at pace."