FCA & Bank of England Unveil Shared Vision for Tokenisation in UK Wholesale Markets

The Financial Conduct Authority (FCA) and the Bank of England have set out a shared long-term vision for the use of tokenisation and distributed ledger technology (DLT) in UK wholesale markets, giving firms greater certainty as they consider adopting these technologies.

Tokenisation involves creating a digital representation of a real-world asset – such as a share, bond or unit of currency – on a digital ledger. The regulators believe it has the potential to streamline the issuance, trading and settlement of assets, supporting market efficiency and resilience while reducing costs.

Responding to industry calls for clearer guidance, the FCA and the Bank have outlined their approach in several priority areas, including prudential treatment, tokenised collateral and settlement instruments. They have also opened a discussion on the principles that should underpin future regulation and infrastructure.

Simon Walls, Executive Director of Markets at the FCA, said tokenisation had the potential to reshape how assets are issued, traded and settled, and that the partnership with the Bank of England would ensure a consistent approach across wholesale markets. Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, added that the task now was for the public and private sectors to move "from pilots to production" to support financial stability and sustainable growth.

Alongside the joint vision, the Bank of England has launched a consultation on extending Real-Time Gross Settlement (RTGS) and Clearing House Automated Payment System (CHAPS) settlement hours, with a staged path towards near 24/7 operation. The Bank has also committed to launching a live synchronisation service, targeted for 2028, and is working to enable tokenised equivalents of eligible assets to be used as collateral – work that supports HM Treasury's pilot issuance of a digital gilt instrument (DIGIT).

The Prudential Regulation Authority (PRA) has issued Dear CEO letters setting out updated guidance on the prudential treatment of tokenised asset exposures and on innovations in deposits, e-money and stablecoins. The FCA, meanwhile, has confirmed it will consider how its Client Assets (CASS) rules may evolve in response to industry feedback, building on its recent policy statement on fund tokenisation.

The Bank and the FCA continue to work with 16 firms on the live issuance and settlement of tokenised assets through the Digital Securities Sandbox. Feedback on the Call for Input closes on 3 July 2026, with a feedback statement expected in the summer.

Read the press release here.