Michael LewisThe BoE and FCA have set out their vision for how firms can adopt tokenisation and DLT, which they say has the potential to streamline wholesale markets.
The regulators have listened to firms’ requests for more certainty on how regulation will react, and are now setting out their approach on aspects such as prudential treatment, tokenised collateral and settlement instruments. They have written to CEOs with updated guidance on prudential treatment of tokenised asset exposures and on innovations in deposits, e-money and stablecoins, and the BoE proposal to extend settlement hours will also support cross-border payments and new models as tokenisation develops. It is also planning a new synchronisation service, probably in 2028, to enable tokenised equivalents of assets that are already eligible to be used as collateral at CCPs and central bank operations.
The Call for Input asks for views on a wide-ranging set of issues, including where the greatest benefits could be in using tokenisation, what the regulatory priority areas should be, how regulation is currently constraining firms from offering and using tokenised securities products, and how client asset protection should be achieved. It closes on 3 July.