UK Regulators Set Out Plan to Speed Up Tokenization in Wholesale Markets

The Financial Conduct Authority (FCA) and the Bank of England have published a joint strategy aimed at accelerating tokenization across UK wholesale markets, giving financial firms clearer direction on how to adopt distributed ledger technology. In a press release on Monday, the regulators said tokenization—creating digital representations of real-world assets on blockchain-based ledgers—could improve wholesale market efficiency by simplifying asset issuance, trading and settlement. With uptake increasing, firms have asked for more regulatory clarity. The authorities said their work will cover areas including prudential treatment, tokenized collateral and settlement instruments, alongside a broader discussion on the future shape of market infrastructure and regulation. FCA executive director Simon Walls said tokenization could reshape wholesale finance and help the UK stay globally competitive. Bank of England deputy governor Sarah Breeden said the focus now is moving beyond pilot programmes to full-scale deployment. "The Bank and FCA have done a huge amount to enable the responsible adoption of tokenization in retail and wholesale finance in the UK, working with the government and the industry. The task now is for public and private sectors together to build on these strong foundations, moving from pilots to production to support financial stability and sustainable growth," Breeden said. The regulators are seeking industry input to develop a joint roadmap for digital wholesale markets. Related initiatives include a consultation on extending RTGS and CHAPS operating hours toward near 24/7 settlement, and updated guidance from the Prudential Regulation Authority on tokenized assets, stablecoins and digital deposits. The FCA also said it will continue reviewing client asset rules and advancing fund tokenization policy.