Bank of England Opens Consultation to Clarify Rules on Tokenised Collateral at UK Clearing Houses
Bank of England Opens Consultation to Clarify Rules on Tokenised Collateral at UK Clearing Houses #
The Bank of England has opened a public consultation on how central counterparties (CCPs) can accept tokenised forms of eligible collateral, part of a broader effort to bring distributed-ledger technology into the UK’s core financial market infrastructure.
The Bank published a proposed Supervisory Statement setting out how it would assess applications from CCPs seeking to accept tokenised collateral. The BoE signalled that the existing regulatory framework is not, in itself, an obstacle, provided the collateral continues to satisfy the standards already required in central clearing. The draft statement aims to deliver greater regulatory certainty rather than impose new obligations or create a separate regime.
Under the proposed guidance, tokenised collateral would need to remain capable of being valued, transferred and realised when needed, including under stressed market conditions. The BoE said it is applying the principle of “same risk, same regulatory outcome,” meaning different tokenised collateral arrangements may satisfy those requirements through different technical means. Government bonds are among the assets explicitly considered in tokenised form.
The Bank said tokenisation could speed up the mobilisation of collateral across jurisdictions, letting clearing members respond faster to margin calls and giving CCPs more flexibility in collateral management.
Sarah Breeden, the Bank’s Deputy Governor for Financial Stability, connected the consultation to the bank’s secondary objective of supporting innovation. “Through today’s consultation, the Bank is further delivering its secondary objective for innovation in financial market infrastructure, while maintaining financial stability,” she said. “It’s part of a major agenda between authorities and industry to enable the responsible adoption of tokenisation in financial markets.”
The proposed Supervisory Statement covers collateral that CCPs already accept as well as types that would qualify under the proposed UK CCP Rulebook but are not yet in active use. The BoE is inviting responses from CCPs and their participants, infrastructure providers, technology firms and other interested stakeholders. The consultation closes on 12 February 2027, after which the Bank expects to publish its policy response and final rules.
The consultation runs alongside a parallel exercise in Europe. The European Securities and Markets Authority (ESMA) has issued its own call for evidence on tokenised collateral in central clearing, suggesting regulators in both jurisdictions may converge on common approaches to blockchain-based assets in systemically important financial infrastructure.
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