Bank of England Opens Consultation on Next-Gen Retail Payments Infrastructure

The consultation, launched on 25 Jun, is organised around three areas: the payment journeys the new infrastructure should support, the design principles that should guide it, and how the core sits within the wider payments' ecosystem. Priority use cases include account-to-account payments at the point of sale and improved cross-border payments – both areas where tokenization and blockchain technology could improve efficiency.

RPIB chair Victoria Cleland described the consultation at the UK Finance Digital Innovation Summit in London as "a real opportunity to transform the UK's retail payments' infrastructure."

UK Finance said in an email to Sandmark that "the UK is well-positioned to lead the way in a new world of digital assets and tokenisation because of our world-leading banking, insurance, fintech and professional services industries."

Audience sentiment on whether the initiative would translate into practical implementation was considerably cooler: in a live poll of 65 attendees, 61% said they were no more than "a little bit confident" that enough progress would be made within a year.

Focus on interoperable 'multi-moneyverse'

The consultation paper frames stablecoins and digital assets as part of a "multi-moneyverse" of new and existing forms of digital money, alongside bank deposits, tokenized deposits and a potential digital pound. Interoperability between these different payment methods is identified as a key objective of the new framework.

That framing has drawn positive reactions from industry. "If we're really serious about consumer choice, then that interoperability and bringing it mainstream – creating a foundation where people can choose to use it in that same safe, resilient environment we've got today for fiat payments – is really exciting," said Emma Hogan, chief executive of ClearBank UK, speaking at the summit.

"Embracing the innovation and seeing it as part of the transfer of value ecosystem rather than sizing [...] is going to make something transformational for consumers who really want to get involved but don't necessarily today have the confidence or understanding of how that works."

Robin Nordnes, chief executive of Raiku, a service that addresses transaction congestion on Solana (SOL), told Sandmark in an email that if interoperability is solved at the settlement layer, it could be "a genuine opportunity" for the UK. 

"Traditional payment systems settle because an institution confirms the transaction. A blockchain-based stablecoin settles when the network confirms it," he said. "Those are different guarantees operating on different timeframes, and infrastructure designed to be neutral across them needs to account for that difference explicitly."

The paper identifies direct participants in the clearing layer as "regulated private money issuers, such as commercial banks and building societies," alongside e-money providers. A regulated stablecoin issuer is described as a possible "third form of private money provider" that could access the new infrastructure "subject to further assessment."

Stablecoin backdrop 

The consultation launched four days after the BoE published its updated draft Code of Practice for sterling-denominated systemic stablecoins on 22 Jun – as Sandmark previously reported – which relaxed earlier requirements and dropped individual holding limits in favour of a £40bn issuance cap per coin, while allowing issuers to hold 70% of their reserves in interest-bearing assets.

UK Finance Director of digital money and payments, Rhiannon Butterfield, was positive about the rules. "The BoE systemic rules were designed with a specific future state in mind – where stablecoins might be used for everyday retail payments," she said. "This context is important for framing the balance between the opportunities and risks that the Bank is seeking to find."

However, despite the concessions in the 22 Jun rewrite, the rules drew concern from parts of the industry. Janine Hirt, chief executive of Innovate Finance, a UK fintech association, told The Fintech Times that "the Bank of England's approach still risks creating the most conservative and cautious stablecoin regime in the world," warning of "a significantly increased risk of dollarisation of the economy" if the policy passes unchanged.

The BoE's internal thinking on digital money remains divided. Monetary Policy Committee member Megan Greene said in May that tokenized deposits would probably displace stablecoins, telling a conference in Dubrovnik that "five years from now, I suspect we might wonder why we were talking about stablecoins." Governor Andrew Bailey warned in July 2025 that stablecoins could pull deposits out of banks and weaken lending capacity, telling The Times he struggled to see their value compared to tokenized deposits, where the liability stays with a bank.

A sceptical room

Industry voices on stage were warmer than the audience poll suggested. Hogan said digital assets had moved "from edge cases" toward the mainstream over the past 18 months, pointing to Great British Tokenized Deposits (GBTD), a tokenized sterling deposit pilot that UK Finance is running with six large banks.

Panellists nonetheless tempered their optimism with warnings drawn from the previous attempt to rebuild the UK's payments infrastructure. The New Payments Architecture (NPA), after repeated delays, was cut back to little more than a Faster Payments replacement. 

Vocalink chief executive Keith Douglas said the consultation pointed to a "very ambitious" framework that "feels very different to NPA" and highlighted broad cross-industry engagement – while cautioning that ambition "is not met by clear decisions" unless the industry prioritises and delivers. The audience poll suggested that the room is reserving judgment until implementation begins.