UK regulators push tokenisation from pilots toward wholesale market use

The FCA and Bank of England have set out a shared vision for tokenisation in UK wholesale markets, giving financial firms clearer direction on how distributed ledger technology could move from pilots into wider market use.

The regulators are seeking industry views on how tokenised assets, settlement instruments and market infrastructure should develop across wholesale finance.

The move matters because tokenisation is shifting from experimental projects into practical questions about securities issuance, collateral, settlement and market resilience. Firms have been asking for more certainty on regulation, prudential treatment and infrastructure before committing larger investment.

For banks, asset managers and market infrastructure providers, the strongest implication is operational. Tokenisation could reduce settlement friction, improve collateral mobility and support faster market processes, but only if legal certainty, risk controls and interoperability are strong enough.

The Bank of England has also published a consultation on extending RTGS and CHAPS settlement hours, including weekend and longer daily operating hours. That could support new settlement models as tokenisation develops.

The PRA has separately issued guidance on tokenised asset exposures, deposits, e-money and stablecoins, reinforcing that innovation will still need to fit within existing risk management expectations.

The UK is trying to move digital wholesale markets beyond isolated tests. The challenge now is whether regulators and industry can build infrastructure that is efficient enough to matter, but robust enough for systemically important markets.