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On 14 September 2026, the FCA and the Bank of England (“BoE“) published a feedback statement (FS26/1) on supporting the safe adoption of tokenisation in UK wholesale financial markets. The statement follows a call for input published in May 2026, to which 123 responses were received. Firms were broadly supportive, with a consensus that tokenisation represented a major opportunity, particularly for post-trade activities. Key themes raised included:
- Speed. Regulators need to move faster. Respondents called for concrete timelines and milestones, particularly on prudential treatment, CASS rules and tokenised deposits.
- Pilots. There were calls for a permanent, scalable framework for settling digital securities once the Digital Securities Sandbox concludes, and for revisiting the broader Central Securities Depositories Regulation regime.
- Collateral. This was the standout use case. Respondents pushed for greater clarity on which tokenised assets, including tokenised Money Market Funds, would qualify as eligible collateral, with a view to unlocking greater collateral mobility.
- Settlement. Firms wanted blockchain-settled transactions to be able to access insolvency protections under the settlement finality regulations, arguing that contractual finality alone was insufficient. They also called for stablecoins to be allowed as settlement assets. Since the Call for Input, the regulators have confirmed that stablecoins can be used as settlement assets in the Digital Securities Sandbox, subject to conditions.
- Interoperability. Many respondents argued this deserves its own dedicated workstream. The focus was not just on technical compatibility but on achieving legal, regulatory and cross-jurisdictional alignment to avoid liquidity fragmentation.
- Accountable persons. There was broad support for the principle that every regulated activity must have an identifiable person responsible for compliance, though some were concerned this could make it difficult for firms to use decentralised finance technology in practice.
- Custody. The consensus favoured a regime broadly aligned with CASS 6, supplemented by targeted requirements for blockchain-specific risks like private key management. The FCA plans to consult on these rules in the first half of 2027.
The regulators will publish a joint roadmap later in 2026 setting out next steps and target dates. The FCA encourages firms to keep exploring business cases for tokenised infrastructure. It has also issued a call for input on tokenised gold.
About the author(s)
Duncan is a Principal Associate in the Funds and Financial Services team specialising in financial services regulation.
Duncan advises clients across a wide range of sectors including banking, consumer finance, payment services, insurance, asset management and pensions with a particular focus on retail banking, regulated credit and payment services.