Regulations

Story: FCA and Bank of England Push Tokenisation Into UK Wholesale Markets

By Julie Binoche

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Bank of England Moves on Settlement and Collateral. Sarah Breeden, the Bank of England's deputy governor for financial stability, said significant…

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Digital Securities Sandbox and the DIGIT Pilot. The Bank of England is already running a live testing environment.

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The FCA and the Bank of England want to move fast. Together, they've laid out a joint vision to push tokenisation and distributed ledger technology into the heart of UK wholesale…

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Tokenisation, at its core, means creating digital representations of real-world assets — shares, bonds, that sort of thing — on a digital ledger.

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Simon Walls, the FCA's executive director of markets, flagged the transformative potential tokenisation holds for wholesale asset markets.

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Sarah Breeden, the Bank of England's deputy governor for financial stability, said significant progress has already been made toward responsibly adopting tokenisation.

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That's not just talk. The Bank of England has launched a consultation on extending settlement hours for RTGS and CHAPS — proposing something close to round-the-clock operations.

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The Prudential Regulation Authority has also stepped in. The PRA issued updated guidance on the prudential treatment of tokenised assets, bringing it in line with where markets…

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And there's more in the pipeline. The Bank of England is working toward a live synchronization service — expected by 2028 — that will support the use of tokenised assets as…

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Read also: UK Regulators Want Tokenization Feedback From Industry Before July 3 Deadline

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The Bank of England is already running a live testing environment. It's collaborating with 16 firms through the Digital Securities Sandbox to facilitate the live issuance and…

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On top of that, the Bank is supporting HM Treasury's pilot issuance of a digital gilt instrument, known as DIGIT.

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The FCA, meanwhile, isn't standing still. It recently released a policy statement on advancing fund tokenisation, which fits into its wider push to bring digital assets properly…

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The feedback period on current regulations and infrastructure closes July 3. A feedback statement is set to come out sometime in the summer after that.

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Related: Bereavement Support Under FCA Scrutiny as Fewer Than Half of Clients Feel Helped

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