Bank of England, FCA Set Out ‘Shared Vision’ for Tokenization
The Financial Conduct Authority (FCA) and the Bank of England issued a joint Call for Input to clarify regulatory and infrastructure approaches for tokenisation in UK wholesale financial markets as distributed ledger technology advances from testing to operational use. They aim to provide greater certainty in areas like prudential treatment, tokenised collateral, and settlement instruments. The Bank plans to launch a live synchronisation service by 2028, consult on near 24/7 RTGS and CHAPS settlement, and support HM Treasury's pilot of a digital gilt instrument (DIGIT). The regulators are also working with 16 firms in the Digital Securities Sandbox and have updated guidance on prudential treatment for tokenised assets and stablecoins. Recent announcements follow industry feedback, with the Bank reassessing its proposed stablecoin regulations and preparing to accept applications from systemic stablecoin issuers. The initiatives are intended to foster financial stability, support sustainable growth, and embrace innovations like DeFi within the regulatory framework.
