Bank of England, FCA Launch Wholesale-Market Tokenization Consultation, Plan Near-24/7 Settlement

The Bank of England (BoE) and the UK Financial Conduct Authority (FCA) are advancing the tokenization of wholesale financial markets, allowing bonds, funds and collateral to be traded through distributed ledgers. Key issues include banks’ prudential capital treatment and the eligibility of tokenized collateral, which will determine whether digital assets can be integrated into existing financial infrastructure.

The BoE and FCA have launched a joint consultation, with responses due by July 3. No investment or transaction amount was disclosed. The BoE is also seeking feedback on extending the operating hours of its Real-Time Gross Settlement system (RTGS) and CHAPS, with plans to move toward settlement availability for nearly 24 hours a day, seven days a week.