Bank of England and FCA Seek Industry Input on Tokenized Wholesale Markets

Key Takeaways:

• The Bank of England and Financial Conduct Authority have launched a joint consultation on regulating tokenized wholesale financial markets in the UK. 
• The consultation focuses on tokenized securities such as bonds, equities, and fund units, with responses due by July 3.
• 16 firms are already progressing through the UK’s digital Securities Sandbox to test tokenized asset issuance, trading, and settlement. 

The Bank of England and the Financial Conduct Authority (FCA) have launched a joint consultation to gather feedback on the regulation and infrastructure needed for tokenized wholesale infrastructure markets in the United Kingdom. The initiative is part of the government's Wholesale Financial Markets Digital Strategy, which identifies tokenization as a major opportunity to improve post-trade processing and collateral management. 

Tokenized Securities and Settlements

The consultation covers tokenized bonds, equities, and fund units while also addressing prudential treatment, tokenized collateral, and settlement instruments. Banks, investment firms, trading venues, and fintech companies have until July 3 to submit responses. Regulators will then hold workshops and publish a feedback statement in summer 2026, followed by a cross-authority roadmap later in the year. 

24/7 Settlement Plans

The move builds on the UK’s Digital Securities Sandbox, where 16 firms are preparing to test tokenized insurance, trading, and settlement in a regulated environment. Separately, the Bank of England is considering 24/7 operations for RTGS and CHAPS and plans to launch a synchronization service by 2028 to support tokenized assets as collateral. 

In April, the FCA introduced new rules to support broader adoption of tokenized funds, including optional direct-to-fund dealing and guidance for maintaining investor registers on a distributed ledger system.