Bank of England Highlights Tokenization Benefits for Faster Payments and Lower Costs

The Bank of England is increasing its focus on digital finance as officials explore how tokenization and regulated digital money could improve the country’s financial system. Deputy Governor Sarah Breeden said tokenized assets may help lower costs, improve payment efficiency and encourage greater competition across financial markets.

Bank of England Sees Tokenization as Financial Market Upgrade

Speaking during London’s City Week event, Sarah Breeden explained that tokenization the process of placing assets and money on digital ledgers could make payments and settlements faster and more efficient. She said the technology may also improve how financial markets operate by reducing delays and operational costs.

Breeden stressed that trust must remain central to any digital finance system. According to her, central bank money will continue to act as the main foundation of the monetary system, even as private innovations expand.

Stablecoins and Tokenized Deposits Gain Attention

The Bank of England is reviewing how regulated stablecoins and tokenized bank deposits can work alongside traditional payment methods. Breeden said consumers may eventually use tokenized deposits, regulated stablecoins and possibly a retail central bank digital currency (CBDC).

UK Settlement System Could Move Toward 24/7 Operations

The central bank has also proposed extending settlement system operating hours to near 24/7 availability. Officials believe longer hours could support cross-border payments and growing tokenized asset markets while helping the UK strengthen its position in digital finance innovation.