The UK’s two most powerful financial regulators have released a coordinated strategy to embed tokenization across wholesale markets, giving financial firms long-requested clarity on adopting distributed ledger technology at scale. The joint FCA and Bank of England press release, published Monday, outlines how digital versions of real-world assets recorded on blockchain-based ledgers could streamline issuance, trading and settlement across UK wholesale finance.
Bank of England deputy governor Sarah Breeden was direct about the objective: “The task now is for public and private sectors together to build on these strong foundations, moving from pilots to production to support financial stability and sustainable growth.” FCA executive director Simon Walls added that tokenization has the potential to keep the UK globally competitive in wholesale finance.
What the Framework Actually Covers
The regulators addressed four specific pressure points firms have flagged: prudential treatment of tokenized assets, the use of tokenized collateral, settlement instruments, and the future shape of market infrastructure.
These areas were chosen in direct response to industry requests for guidance as adoption accelerated faster than existing rules anticipated.
Supporting the framework, the Prudential Regulation Authority issued updated guidance covering tokenized assets, stablecoins and digital deposits.
The FCA separately confirmed it will continue reviewing client asset rules and advancing fund tokenization policies, signaling that the regulatory perimeter is expanding rather than simply clarifying existing boundaries.
A consultation on extending RTGS and CHAPS settlement hours toward near-24/7 operations also accompanies the announcement.
That proposal has direct implications for how tokenized asset transactions settle against sterling, a persistent gap in earlier pilot programs that limited institutional appetite for full deployment.
Industry Feedback and the Road to Production
Regulators are now actively soliciting industry responses to shape a joint roadmap for digital wholesale markets. The feedback window signals that Monday’s release is a starting framework rather than a finalized rulebook, leaving room for firms running blockchain-based settlement trials to influence the final design.
NEAR Protocol is among the blockchain networks referenced in discussions around programmable asset infrastructure, as developers on the NEAR ecosystem have explored tokenized finance applications.
Broader Layer 1 competition for institutional tokenization mandates remains active, with several networks positioning settlement speed and compliance tooling as differentiators.
The UK’s move arrives as tokenized real-world assets have grown significantly across global markets in the past 18 months, and competing jurisdictions including the EU and Singapore have already moved regulatory frameworks closer to production readiness.
The joint FCA and Bank of England approach attempts to close that gap without sacrificing the prudential guardrails regulators consider non-negotiable.
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