The Financial Conduct Authority and the Bank of England have jointly outlined a 'shared vision' for tokenization in UK wholesale financial markets. The regulators launched a Call for Input to provide greater regulatory certainty as distributed ledger technology moves from pilots to production.
The goal is to clarify rules on prudential treatment, tokenised collateral, and settlement instruments. Sarah Breeden, deputy governor for financial stability at the Bank of England, urged both private and public sectors to build on existing foundations. Simon Walls, the FCA's executive director of markets, said tokenisation could 'transform wholesale markets - reshaping how assets are issued, traded and settled.'
The central bank also confirmed plans to launch a live synchronisation service by 2028, consult on expanding RTGS and CHAPS settlement hours to near 24/7 operation, and support HM Treasury's pilot issuance of a digital gilt instrument called DIGIT.
Katie Harries, Head of Policy for Europe at Coinbase, welcomed the announcement as a 'clear vision' and urged the regulators to embrace DeFi.
The Bank and the FCA continue to work with 16 firms on live issuance and settlement of tokenised assets through the Digital Securities Sandbox. The Prudential Regulation Authority has issued updated guidance on the prudential treatment of tokenised assets, stablecoins, and other crypto exposures.
This announcement follows the Bank of England's recent consideration of easing its proposed stablecoin reserve floor and retail holding caps, which had faced industry pushback.