Could tokenisation make collateral work harder? The Bank of England is consulting on its approach to central counterparties (CCPs) accepting tokenised forms of eligible collateral. The proposals aim to give CCPs and their participants greater clarity as they explore the opportunities that tokenisation could offer.
The potential benefits include quicker, more efficient mobilisation and management of collateral, including across jurisdictions. This could help firms respond more effectively to margin calls, improve collateral management and support innovation in central clearing — contributing to the UK's wholesale digital financial markets strategy.
The Bank's message is that tokenisation need not be a regulatory barrier. It considers that the existing framework already allows CCPs to accept tokenised forms of eligible collateral, provided they meet the standards required in central clearing. Crucially, that collateral must still be capable of being valued, transferred and realised when needed — including in stressed conditions.
The proposed Supervisory Statement would clarify how the Bank assesses applications involving tokenised collateral. Its guiding principle is "same risk, same regulatory outcome": different tokenised collateral arrangements may achieve the required outcomes in different ways.
The consultation is part of the Bank's broader work with the FCA, HM Treasury and industry to support the responsible adoption of tokenisation and clarify the future development of UK digital wholesale financial markets. It also sits alongside wider reforms to the UK regulatory framework for CCPs, including the transition from UK EMIR to the Bank's CCP Rulebook.
The consultation ends on 12 February 2027.
