UK FCA and BoE call for input on tokenisation in UK wholesale markets

The UK Financial Conduct Authority (FCA) and Bank of England (BoE) have published a joint call for input on the development of tokenisation in UK wholesale financial markets. Tokenisation – being the representation and ownership of assets using distributed ledger technology (DLT) – has the potential to transform how assets are issued, traded and settled. The paper seeks feedback on how existing rules and market infrastructure may support or constrain the adoption of tokenisation and includes the following content.

• A potential framework to consider the future use of tokenisation in wholesale markets, covering both the long-term end state and the transition towards it.
• Identification of the key infrastructure, policy and regulatory principles and operational considerations proposed to feature in future policy and regulation.
• Proposals on the regulatory regime for issuing and exchanging digital assets, prudential and collateral treatment, and central bank money settlement of digital asset transactions.
• An initial roadmap of initiatives that will support market evolution, to help industry engagement.

The deadline for responses is 3 July. A feedback statement is due in summer, with a final cross-authority roadmap for the digitalisation of wholesale markets to follow later in the year.

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