FCA and Bank of England seek input on UK wholesale-market tokenisation framework
Key Takeaways
- 01The FCA and Bank of England have opened an industry discussion on a joint framework for tokenisation in UK wholesale markets, with feedback due by 3 July 2026.
- 02The work aims to provide greater certainty on regulation and market infrastructure for DLT-based representations of financial assets.
- 03The authorities are focusing on prudential treatment, tokenised collateral and settlement instruments, while seeking evidence of where current rules or infrastructure create constraints.
- 04The Bank is consulting on longer RTGS and CHAPS hours as a step toward near-24/7 settlement, subject to industry readiness.
- 05The FCA and Bank plan further work on client-asset rules, tokenised collateral eligibility and a live synchronisation service targeted for 2028.
The Financial Conduct Authority (FCA) and Bank of England have set out a joint approach to tokenisation in UK wholesale financial markets and opened a discussion seeking industry feedback. The initiative is intended to give firms greater regulatory and infrastructure certainty as they use distributed ledger technology (DLT) to create digital representations of assets such as shares, bonds and currency.
The authorities are seeking views on where existing rules and market infrastructure support or constrain the safe use of tokenisation. They identify prudential treatment, tokenised collateral and settlement instruments as areas where firms have requested clearer direction. Feedback will inform a joint roadmap for digital wholesale markets. Responses are due by 3 July 2026.
The Bank has also consulted on extending Real-Time Gross Settlement (RTGS) and CHAPS operating hours towards near-continuous, 24/7 settlement. Its staged proposal covers extended daily and weekend hours, subject to consultation and industry readiness. The Bank says this could support cross-border payments and new settlement models as tokenisation develops.
The Prudential Regulation Authority (PRA) has issued Dear CEO letters updating its guidance on prudential treatment of tokenised-asset exposures and on developments involving deposits, e-money and stablecoins. The letters reaffirm firms’ risk-management and compliance expectations.
The FCA will undertake further work on tokenisation, including considering whether its Client Assets Sourcebook (CASS) rules should evolve in response to feedback. The Bank also plans to launch a live synchronisation service, targeted for 2028, and is working to allow tokenised versions of currently eligible assets to be used as collateral at central counterparties and in the Bank’s own operations.
For banks, investment firms, market infrastructures and tokenisation providers, the immediate opportunity is to shape the eventual regulatory roadmap. The announcements do not create a new general tokenisation rulebook, but they signal that the UK authorities are preparing operational, collateral and prudential frameworks for wider wholesale-market use.