The Bank of England and the Financial Conduct Authority have signaled a clear green light for tokenization across the U.K. financial system — and they want industry input as they lay the groundwork.
In a joint statement, the BOE and FCA set out how they plan to support the use of tokenization — the process of representing real-world assets on blockchain networks — in U.K. capital and wholesale markets. Regulators say the technology could reshape how assets are issued, traded and settled and create new opportunities for cost savings, risk reduction and financial innovation.
“Tokenisation has the potential to transform wholesale markets – reshaping how assets are issued, traded and settled,” said Simon Walls, executive director of markets at the FCA. “We want to support firms in adopting this technology to lower costs, reduce risk and unlock new services.”
What the regulators are asking for
- The BOE and FCA are seeking public feedback on where existing rules and infrastructure either enable or hinder the safe use of tokenization. The deadline for responses on the FCA/BOE approach is July 3.
- Separately, the BOE’s consultation on extending settlement hours for CHAPS and RTGS is open to responses through Aug. 10.
Operational changes and timelines
- From September 2027, CHAPS — the U.K.’s high-value, time-sensitive payments system — will extend its current 12-hour weekday cycle to begin as early as 1:30 a.m., specifically to overlap Asian trading hours. RTGS, the settlement accounting system, will be updated to reflect these changes.
- The BOE plans to introduce Sunday and bank-holiday settlement no earlier than 2029.
- By 2031 at the earliest, weekday operations could move toward a near-continuous 22-hour daily window (22x6).
Related regulatory moves
- Last month the FCA issued a policy statement on fund tokenization confirming that on-chain blockchain records can serve as a firm’s primary books and records, removing the previous requirement for duplicate off-chain records.
- Regulators also outlined a runway for stablecoins: rules are being adapted to allow stablecoins to be used to settle unit deals as an interim measure ahead of the U.K.’s finalized crypto framework, scheduled to take effect in October 2027.
Why it matters
- Extended settlement hours and tokenization create the technical and regulatory scaffolding for more continuous liquidity, faster settlement and greater cross-border market integration.
- The FCA’s acceptance of blockchain records and the interim stablecoin regime reduce operational friction for firms experimenting with tokenized funds and settlements.
What market participants should do
- Firms and infrastructure providers should review the consultations and submit views by the published deadlines (July 3 for the tokenization approach; Aug. 10 for RTGS/CHAPS hours).
- Market participants should also assess operational readiness for extended settlement windows, token recordkeeping on-chain, and potential stablecoin use for settlement.
Bottom line: U.K. regulators are positioning the country to adopt tokenization and extended settlement hours as foundational upgrades to financial market plumbing — but they’re asking industry to help shape the rules and timelines.
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