Bank of England Opens Consultation on Tokenized Collateral

The Bank of England has opened a consultation on the digital version of eligible collateral accepted by central counterparties, with current rules allowing relevant assets to be used when they meet clearing standards. The proposed regulatory statement will clarify what central counterparties need to specify when submitting applications, without introducing new regulatory obligations. The Bank of England noted that tokenized collateral must remain capable of being valued, transferred, and liquidated under stress scenarios, and faster cross-jurisdictional asset transfers may help firms meet margin requirements. The consultation will end on February 12, 2027, and the central bank expects to publish its policy response and related rules later this quarter.

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