BoE backs tokenisation to modernise UK payments

Bank of England Deputy Governor Sarah Breeden said tokenisation could improve payment efficiency, reduce costs and strengthen competition across the UK financial system as digital asset infrastructure evolves.

Speaking at City Week in London, Breeden said tokenised money and assets could accelerate settlement and improve financial market functionality while preserving trust and interoperability across payment systems.

“Alongside traditional bank deposits, people should be able to pay with tokenised bank deposits, regulated stablecoins and, potentially, a retail central bank digital currency,”

Breeden said, according to the speech transcript.

Breeden added that central bank money would remain the “anchor” of the monetary system even as private-sector innovation around regulated stablecoins and tokenised deposits expands.

The comments followed a proposal from the Bank of England to extend operating hours for its core settlement infrastructure toward near-24/7 availability to support tokenised securities markets and cross-border payments.

The UK central bank has also recently reconsidered parts of its earlier approach to pound-denominated stablecoins, including whether to ease limits on consumer holdings as policymakers seek to strengthen Britain’s position as a competitive digital asset hub.

A January report from the BoE’s CBDC Academic Advisory Group said a retail central bank digital currency may not be strictly necessary to preserve monetary uniformity, although it could still play an important supporting role as cash usage declines across the economy.