Bank of England Opens Consultation on Tokenized Collateral for Clearing Houses

The Bank of England has launched a consultation on how a central counterparty can take digital versions of eligible collateral, saying current rules already permit it when the assets meet clearing standards. A draft supervisory statement would spell out what clearing houses must cover in their applications under the existing approval process. It applies to collateral already accepted and to types that qualify under the proposed UK CCP Rulebook but are not yet used. No new regulatory obligations would be created.

What Tokenized Collateral Must Prove

Under the proposal, tokenized collateral has to stay capable of being valued, transferred and realized, even in stressed market conditions. The bank noted that faster movement across jurisdictions could help firms meet margin calls more easily.

Timeline and Official Comment

Deputy Governor Sarah Breeden said the consultation supports the bank’s innovation goal for financial market infrastructure while protecting financial stability, and forms part of a wider effort with industry to adopt tokenization responsibly. The paper closes on Feb. 12, 2027, and the central bank plans to publish its policy response and rules later this quarter.