USDUK Regulators Set Tokenisation Roadmap
Bank of England and FCA Push Wholesale Markets Toward Production
TL;DR
- The Bank of England and FCA set out a joint vision for tokenisation in UK wholesale markets.
- The plan covers regulation, settlement infrastructure, tokenised collateral, stablecoins, and the Digital Securities Sandbox.
- Feedback on the Call for Input remains open until July 3, 2026.
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The Bank of England and the Financial Conduct Authority set out a joint long-term vision on May 18, 2026, to move tokenisation and distributed ledger technology in UK wholesale financial markets from experimentation toward production deployment.
The joint Call for Input is aimed at giving financial firms greater certainty on regulation, prudential treatment, market infrastructure, tokenised collateral, and settlement instruments as tokenisation adoption expands across wholesale finance. The initiative is designed to support innovation while preserving financial stability, market resilience, and operational integrity.
Tokenisation was described as the digital representation of financial assets, including securities, deposits, and other instruments, on distributed ledger infrastructure. The regulators expect industry feedback to shape future regulatory work and a joint roadmap for digital wholesale market infrastructure.
Settlement Systems and Tokenised Collateral Take Focus
The Bank of England also published a consultation on extending operating hours for the UK’s RTGS and CHAPS settlement systems, outlining a staged route toward near-24/7 settlement operations. The possible changes include weekend and extended daily operating hours, depending on consultation feedback and industry readiness.
The settlement-hours consultation is intended to support cross-border payments and emerging payment and settlement models as tokenisation develops inside wholesale finance. The Bank of England also confirmed plans to launch a live synchronisation service targeted for 2028.
The Bank of England is working to enable tokenised equivalents of eligible assets to be used as collateral at central counterparties and in central bank operations. That work also supports HM Treasury’s pilot issuance of a digital gilt instrument known as DIGIT.
Simon Walls, executive director of markets at the FCA, said tokenisation could “transform wholesale markets” by changing how assets are issued, traded, and settled. Walls said the FCA’s role is to help firms adopt the technology to lower costs, reduce risks, and create new financial services.
Sarah Breeden, deputy governor for financial stability at the Bank of England, said public and private sector participants should build on the “strong foundations” established by the Bank and the FCA as the industry moves “from pilots to production” in support of financial stability and sustainable growth.
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Sandbox Work and Stablecoin Policy Continue
The FCA and the Bank of England continue to work with 16 firms through the UK’s Digital Securities Sandbox, where participants are involved in live issuance and settlement of tokenised assets. The FCA said it will keep considering how its client asset rules could evolve in response to industry feedback and developments in tokenised finance.
The Prudential Regulation Authority issued updated Dear CEO guidance letters covering the prudential treatment of tokenised asset exposures, stablecoins, and innovations involving deposits and e-money. The guidance reiterated supervisory expectations for risk management, governance, and regulatory compliance.
The announcement followed softer recent signals from the Bank of England on stablecoin rules, including Sarah Breeden’s statement to the Financial Times that the Bank was reviewing whether its proposed stablecoin reserve floor and retail holding caps had been “overly conservative” after sustained industry pushback.
Sasha Mills, the Bank of England’s financial market infrastructure director, told the FT Digital Asset Summit that the Bank was treating stablecoins as a “new form of money” and expected to accept applications from would-be systemic issuers by year-end.
Katie Harries, Head of Policy for Europe at Coinbase, welcomed the announcement as a “clear vision for tokenization in financial markets” and urged the Bank of England and FCA to take an ambitious approach to tokenisation that also embraces DeFi.
Feedback on the Call for Input remains open until July 3, 2026. The authorities expect to publish a feedback statement during the summer.
FAQ
What did UK regulators announce?
They announced a joint long-term vision for tokenisation in UK wholesale financial markets.
What is the next deadline?
Feedback on the Call for Input remains open until July 3, 2026.
What infrastructure change is being considered?
The Bank of England is consulting on extended RTGS and CHAPS settlement hours.
What is planned for 2028?
The Bank of England plans to launch a live synchronisation service targeted for 2028.
This article has been refined and enhanced by ChatGPT.
