UK FCA and Bank of England launch consultation on tokenized securities framework

British financial regulators have launched a joint consultation to establish a clear regulatory framework for the use of tokenized securities in wholesale markets. The Financial Conduct Authority and the Bank of England opened the call for input this Monday, seeking industry feedback on rules and infrastructure for digital assets like bonds, equities, and fund shares.

The consultation, which closes on July 3, 2026, is directed at banks, investment firms, asset managers, trading venues, and financial market infrastructure providers. Regulators stated they aim to provide greater clarity in areas where firms have requested it, including the prudential treatment of assets, the use of tokenized collateral, and settlement instruments. This initiative forms part of the government’s broader Wholesale Financial Markets Digital Strategy, which has identified tokenization as a significant opportunity, particularly for improving post-trade processes and collateral management.

Simon Walls, the FCA’s executive director of markets, said tokenization has the potential to transform wholesale markets by reshaping how assets are issued, traded, and settled. Sarah Breeden, deputy governor for...