FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets

FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets

Tokenisation is the process of creating a digital representation of a real-world asset — such as a share, bond or unit of currency — on a digital ledger. It has the potential to streamline wholesale markets, making everything from issuing securities to managing assets faster and more efficient. Along with greater functionality this could support market efficiency and resilience while lowering costs.

The FCA and Bank have heard from industry that firms need more certainty on regulation and infrastructure as tokenisation grows. In response, they have set out their approach in key areas where firms want greater clarity, including prudential treatment, tokenised collateral and settlement instruments.

They have also opened a discussion on key principles for regulation and infrastructure that could facilitate the development of tokenisation in wholesale markets.

Simon Walls, executive director of markets at the FCA said: “Tokenisation has the potential to transform wholesale markets — reshaping how assets are issued, traded and settled. We want to support firms in adopting this technology to lower costs, reduce risk and unlock new services, and our partnership with the Bank of England will ensure a common approach across all parts of wholesale markets.

Today we are setting out the principles of a shared long-term vision to give industry the clarity it needs to engage, invest and innovate with confidence. UK markets have always embraced new technology, and that will be central to ensuring the UK remains at the forefront of global wholesale markets.”

The FCA and the Bank of England are seeking industry views on where existing rules and infrastructure support or constrain the safe use of this technology. Feedback will help shape future work and inform the next steps of developing a joint roadmap for digital wholesale markets.

Supporting action from the Bank of England and PRA

The Prudential Regulation Authority (PRA) has published Dear CEO letters setting out updated guidance on the prudential treatment of tokenised asset exposures and on innovations in deposits, e-money and stablecoins. These reflect recent market developments and reaffirm expectations on risk management and compliance.

The FCA's commitments

The FCA is committing to further work to support tokenisation in the UK, including considering how its approach to the application of client asset (CASS) rules may evolve in light of industry feedback. The FCA recently published its policy statement on progressing fund tokenisation.

Notes to editors

Read the Call for Input: The future of tokenisation: A joint vision for UK wholesale financial markets.

Feedback closes on 3 July 2026.

A feedback statement will be published in the summer.

The FCA recently published its policy statement on progressing 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.

The Bank is also committing today to launch a live synchronisation service, targeted for 2028, and working to enable tokenised equivalents of already eligible assets to be used as collateral both at central counterparties and in its own central bank operations. This work is also supporting HM Treasury’s pilot issuance of a digital gilt instrument (DIGIT).

The Prudential Regulation Authority (PRA) has published Dear CEO letters setting out updated guidance on the prudential treatment of tokenised assets, stablecoins and other crypto asset exposures and on innovations in deposits, e-money and stablecoins, reflecting recent market developments and reaffirming expectations on risk management and compliance.

The Bank has published a consultation on extending RTGS and CHAPS settlement hours, setting out next steps towards near 24/7 settlement, with a staged approach including weekend and extended daily operating hours, subject to consultation and industry readiness.

Distributed ledger technology (DLT) is the underlying infrastructure that makes tokenisation possible. A distributed ledger is a shared, digital record of transactions that is maintained simultaneously across multiple locations or participants, rather than being held in a single central database.