Bank of England sets out approach to tokenised collateral in central clearing

What happened: The Bank of England launched a consultation on central counterparties accepting tokenised forms of eligible collateral, proposing a Supervisory Statement on how it would assess such applications. Key numbers: Consultation closes 12 February 2027. Why it matters: The Bank says the existing regulatory framework is not a barrier provided collateral meets clearing standards, and Deputy Governor Sarah Breeden said the consultation delivers its secondary objective for innovation while maintaining financial stability.

The Bank of England launched a consultation on central counterparties accepting tokenised forms of eligible collateral, proposing a Supervisory Statement on how it would assess such applications.

The Bank says the existing regulatory framework is not a barrier provided collateral meets clearing standards, and Deputy Governor Sarah Breeden said the consultation delivers its secondary objective for innovation while maintaining financial stability.