The Bank of England and FCA launch public consultation on tokenization of wholesale financial markets

ME News, on May 18 (UTC+8), the UK Financial Conduct Authority (FCA) and the Bank of England (BOE) jointly launched a public consultation on Monday, seeking industry input on the regulation, infrastructure, and market practices of tokenized wholesale financial markets in the UK. This consultation is part of the UK’s digital financial markets strategy and focuses on tokenized securities and post-trade infrastructure, covering areas including prudential regulation, tokenized collateral, and settlement tools. The regulators said that tokenization presents significant opportunities in post-trade processes and collateral management. The consultation targets include banks, investment firms, asset management institutions, Central Securities Depositories (CSDs), Central Counterparties (CCPs), trading venues, fintech companies, and others. The current scope mainly involves tokenized bonds, stocks, and fund shares, and may be further expanded in the future. Market participants can submit feedback before July 3. The FCA and the Bank of England plan to publish a feedback document in the summer of 2026 and roll out a digital wholesale market development roadmap within the year.

Meanwhile, UK regulators are also pushing forward the "Digital Securities Sandbox" program. So far, 16 companies have passed the initial phase of review and are testing the issuance, trading, and settlement of tokenized securities. In addition, the Bank of England has separately released a consultation document on extending the operating hours of the RTGS and CHAPS systems, planning to gradually move toward an operation model close to 7×24 hours, and aiming to introduce synchronized settlement services before 2028 to support tokenized assets as central bank operational tools and as collateral for central counterparties. (Source: ChainCatcher)