The Bank of England and the Financial Conduct Authority have presented a new approach to the use of tokenization in the country’s financial markets and are seeking public comments. Tokenization is known as the process of transferring real-world assets to the digital environment with blockchain technology. Thanks to this technology, it is possible to issue, buy, sell and settle traditional financial instruments in a more efficient and innovative way.
Economic growth and innovation target
In the joint statement of both institutions, it was mentioned that the public and private sector’s use of this innovative technology in financial infrastructures will contribute to economic growth and innovation. Regulators also plan to collect opinions on the extent to which existing rules and infrastructure support or hinder the safe use of tokenization. The deadline for those who wish to submit their opinions was announced as July 3.
It was emphasized that tokenization has a significant transformation potential in wholesale markets and can reshape the issuance, transaction and settlement processes of assets. It was also stated that as companies adopt this technology, costs can be reduced, risks can be reduced and new services can be offered.
Comprehensive changes in payment systems are on the agenda
The Central Bank is planning radical changes in payment systems. In particular, it was announced that the CHAPS system, which is used for high amount and time-sensitive payments, and the central payment network RTGS will extend the 12-hour weekday cycle until 01:30 at night, starting from September 2027. This arrangement is designed to reduce the time difference with Asian markets. CHAPS and RTGS are known as one of the cornerstones of the UK’s bank transfers and large-scale financial transactions.
In addition, providing the opportunity for reconciliation on Sundays and public holidays before 2029; It was stated that it is aimed to switch to a 22-hour uninterrupted transaction window on weekdays by 2031. The bank expects public opinion on these regulations until August 10.
Fund tokenization and stablecoin steps
Last month, the FCA published a policy text on fund tokenization. According to this text, records on the blockchain can now be considered as the main ledger for companies. Thus, the necessity of keeping a separate record of transactions outside the blockchain was eliminated. This development shows that trust in digital records is increasing in the financial sector.
Regulators also announced a tentative roadmap for stablecoin usage. In the FCA’s statement, it was stated that regulatory changes that will allow stablecoins to be used in unit transactions are being worked on before the new crypto legislation comes into force in October 2027. Stablecoins are digital assets that generally index their value to stable currencies and are developed with the aim of providing stability in crypto payment systems.
