Bank of England consults on tokenised collateral in central clearing

What happened

The Bank of England launched a consultation on 29 October 2026 setting out its proposed approach to central counterparties (CCPs) accepting tokenised forms of eligible collateral. Responses are due by 12 February 2027.

The proposed Supervisory Statement would clarify how the Bank assesses applications involving tokenised collateral. The Bank said the existing regulatory framework is not a barrier to acceptance, provided the collateral meets the standards required in central clearing.

Those requirements include the ability to value, transfer and realise collateral when needed, including under stressed conditions. The proposal therefore focuses on how tokenised arrangements meet existing regulatory outcomes, rather than treating tokenisation itself as an obstacle to acceptance.

Why it matters

According to the Bank, tokenisation could make the mobilisation and management of collateral quicker and more efficient, including across jurisdictions. That could help firms respond more effectively to margin calls and improve collateral management.

For CCPs and their participants, the proposed statement would provide greater clarity when exploring these arrangements. The Bank said different tokenised collateral models may achieve the required outcomes in different ways, consistent with its principle of applying the same regulatory outcome to the same risk.

Deputy Governor for Financial Stability Sarah Breeden framed the consultation as supporting innovation in financial market infrastructure while maintaining financial stability.

Context / What to watch

The consultation forms part of the Bank’s wider work with the FCA, HM Treasury and industry on responsible adoption of tokenisation and the development of UK digital wholesale financial markets.

The Bank is seeking responses from CCPs, market participants, infrastructure providers, technology firms and other stakeholders exploring tokenised collateral. The statement remains a proposal: the consultation sets out how the Bank would assess arrangements, rather than announcing approval of a particular application.