UK digital payments: Welcome to the Multi-Moneyverse

Key takeaways:

• the Bank of England outlines its UK digital payments vision
• different forms of money to be freely exchangeable (including bank deposits, stablecoins and central bank money)
• singleness of money preserved, and trust in money safeguarded
• more progressive stance by the Bank of England

"Multi-money"

The Bank of England kicked off September 2025 with some late summer sunshine. Deputy Governor Sarah Breeden set out her vision for a UK "multi-money" system.

The UK central bank acknowledges that there will be different forms of money and payments, and that users of money will have a choice. This is the crux of the speech, which is set against the backdrop of 2025's so-called "stablecoin summer". 

For those supportive of stablecoins, this speech will have come as a welcome change of tone, following Governor Andrew Bailey's July 2025 Mansion House speech, which was less than effusive in relation to stablecoins and other alternative forms of payments.

Other jurisdictions have their own digital payment trajectories (for example the US; see our analysis here). Sarah Breeden's speech recognises that the UK's regime will differ.

The vision has three strands.

1. Infrastructure 

The Bank of England sees central bank money at the heart of the financial system, including in a tokenised world. The Deputy Governor points to the UK's new Real Time Gross Settlement service (RT2), with its ability to support onchain central bank money settlement, as crucial infrastructure supporting the future of trading and settlement.

Work on the possibility of a retail UK digital pound continues. So too does the Bank's work with the BIS Innovation Hub, looking at whether wholesale central bank money can be transacted and settled on external ledgers outside the central bank's control.

2. Regulation

The Bank of England will provide regulatory frameworks, and supervise financial market infrastructure (FMI) and private money issuers. 

The UK central bank's view remains that central bank money must be the settlement asset for systemically important markets. At the same time, it recognises that there will be an important role in the financial system for privately issued money: both tokenised deposits and stablecoins.

The Bank of England sees stablecoins as "beginning to go mainstream". Based on industry feedback, evolving digital asset business models, and new use-cases, revised UK regulatory stablecoin proposals are promised for later this year. This will include the ability for systemic stablecoins to hold high quality liquid assets (HQLA) as part of their backing assets.

The UK regulatory regime must ensure trust in money, "regardless of the exact form of digital money". In this way, the Bank of England targets sustainable innovation without compromising financial stability.

3. Vision Strategy

Sarah Breeden highlights the importance of UK regulators setting clear strategy to guide investment and innovation. The Bank of England's UK payment vision:

• is a "multi-money" mixed ecosystem with each form of money playing its own role;
• has interoperability, allowing different forms of money to be freely and frictionlessly exchanged at par;
• has maximised benefits, whilst safeguarding financial stability, resilience and trust in money; and
• allows innovation to thrive in a competitive environment, without "walled gardens".

As the speech notes, a number of other UK payment-related initiatives are already in train too. 

What's next?

The speech is entitled "Building trust and supporting innovation in the multi-moneyverse", which neatly summarises the UK central bank's vision. It is short and pithy, and recommended reading for anyone in this space.

The vision recognises recent digital payments market progression and the groundswell of adoption, probably also with an eye to developments in other jurisdictions. Building on the flurry of UK digital payment regulatory discussion and consultation papers so far in 2025, the Bank of England has now clearly signalled its support for a competitive and innovative digital payments sector, whilst ensuring interoperability, the singleness of money, and monetary trust. This is an important UK inflection point and further lays the foundations for regulatory reform.