Bank of England Consults on Tokenised Collateral Rules for UK Clearing Houses

The Bank of England has opened a public consultation on draft supervisory expectations governing how central counterparties (CCPs) should approach applications to accept tokenised versions of collateral already eligible under the proposed UK CCP Rulebook. The paper does not establish a separate regulatory regime; instead, it clarifies how existing requirements apply when a CCP seeks approval to onboard tokenised assets, responding to industry feedback that the current framework, while not prohibitive, lacks sufficient interpretive guidance.

The Bank’s position is that tokenisation can support faster asset mobilisation and more streamlined collateral management, and that these efficiency gains are consistent with sound risk management in wholesale markets. Under the draft Rulebook, eligible collateral must be highly liquid and carry minimal credit and market risk, covering cash, financial instruments, bank guarantees, and gold. Tokenised forms of these instruments would travel the same approval path as any new collateral type, requiring CCP notification and, in some cases, explicit Bank permission before introduction.

The consultation also casts a wider net, inviting industry views on whether the draft supervisory expectations could extend to a broader range of tokenised asset classes should eligibility criteria evolve in future. CCPs actively considering tokenised collateral acceptance are encouraged to engage the Bank ahead of any formal application. The Bank expects to publish its policy response and final CCP Rulebook rules in the fourth quarter of 2026, at which point the relevant provisions of UK EMIR will be repealed and replaced by Bank-authored rules.