Bank of England Consults on Letting CCPs Accept Tokenised Collateral
The proposed Supervisory Statement says the existing framework is no barrier if tokenised collateral can still be valued, transferred and realised under stress; the consultation closes on 12 February 2027.
By Lucas Ferreira, Journalist, Crypto Infrastructure
The Bank of England has launched a consultation on how it would assess central counterparties (CCPs) that want to accept tokenised forms of eligible collateral. Published on 29 October 2026, the consultation sets out a proposed Supervisory Statement and closes on 12 February 2027.
The Bank's central position is that the existing regulatory framework is not a barrier to CCPs accepting tokenised collateral, provided that collateral meets the standards already required in central clearing. Tokenised collateral must remain capable of being valued, transferred and realised when needed, including in stressed conditions.
This is a proposal, not a final rule. The Supervisory Statement is intended to give CCPs and their participants clarity on how the Bank would assess applications involving tokenised collateral.
What the Bank is proposing
The consultation does not create a new category of eligible collateral. It addresses the form in which existing eligible collateral is held and moved.
Point — Bank of England position
Status — Consultation on a proposed Supervisory Statement
Published — 29 October 2026
Closes — 12 February 2027
Scope — CCP acceptance of tokenised forms of eligible collateral
Core test — Collateral must remain capable of being valued, transferred and realised when needed, including under stress
Principle — "Same risk, same regulatory outcome"; different tokenised arrangements may meet the outcomes in different ways
Respondents sought — CCPs and their participants, infrastructure providers, technology firms and others exploring tokenised collateral
The "same risk, same regulatory outcome" principle matters for design. It signals that the Bank will judge an arrangement on whether it delivers the same valuation, transfer and realisation outcomes as conventional collateral, rather than prescribing one technology or token model.
Why collateral is the use case
The Bank says tokenisation could allow quicker and more efficient mobilisation and management of collateral, including across jurisdictions, helping firms respond to margin calls and improve collateral management. Margin calls in central clearing are time-critical: a participant that cannot move eligible assets fast enough may have to sell assets or raise cash at short notice.
The stress condition is the hard part. Tokenised collateral that works in normal markets but cannot be transferred or liquidated quickly in a crisis would fail the Bank's core test. Market participants building tokenised money-market fund, bond or deposit arrangements for margin will need to show how settlement, custody and legal finality hold up when markets are under pressure.
Sarah Breeden, Deputy Governor for Financial Stability, said the consultation delivers on the Bank's "secondary objective for innovation in financial market infrastructure, while maintaining financial stability", and is "part of a major agenda between authorities and industry to enable the responsible adoption of tokenisation in financial markets".
Part of a wider UK programme
The Bank says the consultation is part of its broader work with the FCA, HM Treasury and industry to support the responsible adoption of tokenisation and give greater clarity on UK digital wholesale financial markets. It links the work to the UK's wholesale digital financial markets strategy.
Next step: industry responses by 12 February 2027. The Bank has not given a date for a final Supervisory Statement.
Sources
- Bank of England, Bank of England sets out approach to tokenised collateral in central clearing, 29 October 2026