- Interim parity: The PRA’s interim position is that tokenised traditional assets should generally be treated the same as non‑tokenised equivalents where legal rights and risks match; this is not a final calibration but a working approach while wider prudential standards are reviewed.
- No bespoke calibrations announced: The May materials did not announce bespoke risk‑weight calibrations for tokenised bonds, equities or fund units, implying the current default is parity rather than new capital charges.
These positions matter for insurers and other long‑term investors because parity of treatment reduces a regulatory barrier to holding tokenised instruments as balance‑sheet assets. The caveat on legal rights means firms must ensure tokenisation does not alter ownership, priority or enforceability compared with conventional securities.
Tokenised collateral and settlement
The Bank has made enabling tokenised collateral a policy priority for market plumbing: it is working to allow tokenised equivalents of assets already acceptable to central counterparties to be used as collateral at CCPs and in the Bank’s central bank operations, subject to appropriate mitigation of tokenisation‑specific risks. That direction does not yet contain the operational detail required by trading and collateral managers.
- CCP and BOE collateral: The Bank is working to allow tokenised equivalents of already eligible assets to be used as collateral both at CCPs and in Bank of England operations, provided tokenisation risks are appropriately mitigated.
For asset and collateral managers, the regulatory direction is supportive, but operational and prudential mechanics — haircut schedules, settlement formats and the BOE’s posting rules — remain undefined and will determine whether tokenised collateral can be deployed at scale.
Market infrastructure, eligibility and adoption
The authorities frame the work as market‑infrastructure enabling: the call concentrates on tokenised securities and market plumbing rather than retail‑facing crypto assets, and the FCA says industry has told them firms need more certainty on regulation and infrastructure as tokenisation grows. Early adopter activity is already visible: 16 firms have passed an initial stage and are working towards going live, signalling that market participants are progressing proofs of concept into production paths.
- Scope: The focus is tokenised securities — such as bonds, equities and fund units — though the authorities expect to look beyond this in future work.
- Early adopters: 16 firms have passed the first stage and are working towards going live with tokenisation projects.
- Regulatory clarity objective: The FCA and the Bank say they want to give industry the regulatory clarity needed to invest in and scale up tokenised financial market infrastructure.
Practical decisions for asset managers, custodians and infrastructure providers will centre on whether tokenised instruments can be integrated into existing trading, custody and reconciliation workflows without creating additional legal or operational fragmentation. The authorities’ engagement and the subsequent roadmap will determine how quickly those integrations can be certified and scaled. The FCA says it will consider how CASS rules may need to evolve in light of industry feedback and has recently published a policy statement advancing fund tokenisation work from pilot to broader deployment.
- CASS review: The FCA is committing further work to consider how its approach to the application of client asset rules may evolve as tokenisation develops.
- Fund tokenisation policy: The FCA published Policy Statement PS 26/7 in April, specifying a framework to move fund tokenisation from experimentation to wider adoption.
Changes to custody and client asset rules will be material for insurers and asset managers that rely on delegated custody, as evolving CASS interpretations will determine acceptable custody models for tokenised fund units and whether custodial segregation and client protections map cleanly from traditional to tokenised formats.
What the authorities will do next
The call for input invites practical, evidence‑based responses and specifies a clear near‑term process. Responses are due by 3 July. The FCA and the Bank will hold industry workshops over the coming month, publish a response statement over the summer and produce a full cross‑authority roadmap for the digitalisation of wholesale markets later in 2026.
- Deadline and engagement: The deadline for responses is 3 July; the authorities will hold workshops and publish a joint response statement over the summer.
- Roadmap timing: The FCA and Bank plan to publish a full cross‑authority roadmap for digital wholesale markets later in 2026.
For investment teams and balance‑sheet managers, the immediate ask is straightforward: respond to the call with specific evidence on prudential impacts, tokenised collateral mechanics and settlement formats, and engage in the workshops so the roadmap reflects operational realities rather than high‑level principles. The authorities have signalled an intent to enable parity where legal and risk equivalence exists, but the final shape of prudential calibration, operational requirements and collateral haircuts will be set through the upcoming policy work. ---
Legislative path
The joint call for input was published on 18 May 2026 and is open for responses until 3 July; after the consultation closes the FCA and the Bank of England will hold workshops, publish a response statement over the summer and develop a full cross‑authority roadmap for the digitalisation of wholesale markets later in 2026.
Sources: fca.org.uk · fca.org.uk
