Bank of England proposes regulatory approach for tokenized collateral in central clearing
Bank of England sets out approach to tokenised collateral in central clearing
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Bank of England has launched a consultation supporting central counterparties (CCPs) in accepting eligible tokenized collateral. The UK central bank considers the existing regulatory framework not to be a barrier, provided that the collateral can still be valued, transferred and liquidated when necessary, including in stress scenarios; tokenization may improve the efficiency of mobilizing and managing collateral across jurisdictions. The consultation closes on 12 February 2027.
The consultation document brings tokenized collateral into the assessment framework for CCP applications and makes clear that it must remain capable of being valued, transferred and liquidated in stress scenarios.
Source:Bank of England · bankofengland.co.uk