Bank of England opens tokenised collateral consultation
Key points
- The Bank of England has launched a consultation on accepting tokenised collateral in central clearing.
- The proposed approach covers eligible collateral and how central counterparties assess tokenised arrangements.
- The consultation aims to clarify regulatory expectations while supporting innovation and maintaining financial stability.
The Bank of England has launched a consultation on central counterparties accepting tokenised forms of eligible collateral.
The proposal could help firms move collateral faster, manage margin calls and improve cross-border operations.
“It’s part of a major agenda between authorities and industry to enable the responsible adoption of tokenisation in financial markets,” Deputy Governor for Financial Stability Sarah Breeden said in a statement.
The Bank considers existing rules compatible with tokenised collateral, provided it meets central clearing standards.
The proposed Supervisory Statement would clarify how the Bank assesses applications involving different tokenised collateral arrangements.
Eligible collateral must remain capable of valuation, transfer and realisation, including during stressed market conditions.
The consultation forms part of wider work with the FCA, HM Treasury and industry on digital wholesale markets.
The initiative marks a shift towards clearer regulatory pathways for tokenised collateral while maintaining financial stability.
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