Bank of England consults on tokenised collateral acceptance by UK central counterparties

The Bank of England has launched a consultation setting out how it expects central counterparties (CCPs) to handle tokenised collateral, signalling that the existing regulatory framework is not itself a barrier to acceptance provided the collateral continues to meet established clearing standards. The proposed Supervisory Statement is designed to give CCPs and their participants clearer guidance on how the Bank would assess applications involving tokenised collateral arrangements, with the consultation open until 12 February 2027.

The Bank’s position rests on a same-risk, same-outcome principle: tokenised collateral must remain capable of being valued, transferred, and realised under stress, but different technical arrangements may satisfy those requirements in different ways. Deputy Governor Sarah Breeden framed the consultation as part of a broader effort to advance responsible tokenisation adoption while preserving financial stability, linking it explicitly to the UK’s wholesale digital financial markets strategy.

The initiative sits within a coordinated programme alongside the Financial Conduct Authority (FCA) and HM Treasury, suggesting that firms operating across clearing, custody, and collateral infrastructure should expect further joint policy outputs rather than treating this consultation in isolation. For CCPs and their participants, the priority question is whether current collateral management workflows and legal arrangements are already structured to satisfy the Bank’s stressed-conditions test, or whether adjustments will be needed ahead of any formal application.