Feedback statement on tokenisation in wholesale markets
Messages from industry
The feedback statement confirms some clear messages received from industry. While there is broadly consistent support for the regulators’ vision, as articulated in the call for input published in May this year, the FCA and the BoE listed the key topics on which comments were received:
- Speed: more progress and clear timeframes, naming prudential treatment, custody, synchronisation and tokenised deposits as particular areas where this is needed;
- Pilots to permanence: scaling up from pilot-level exploration (including in the digital securities sandbox) to full, functional implementation;
- Collateral: clarity on the eligibility of tokenised collateral (including tokenised money market funds) to promote collateral mobility;
- Settlement: settlement finality (i.e. insolvency protection);
- Prudential treatment: clarity on the meaning of the regulators' commitment to treat tokenised and non-tokenised assets equivalently “where legal rights are identical and underlying risks are comparable”;
- Custody: preference to applying existing custody rules to relevant specified investment cryptoassets (a subset of regulated cryptoassets which represent securities and contractual rights, and which are not treated as qualifying cryptoassets);
- Interoperability: greater emphasis on the need for legal, regulatory and cross-jurisdictional interoperability, not merely technical standards;
- Accountable persons: queries on the practicability of having an accountable person in certain digitalised markets that rely on decentralisation.
Benefits of tokenisation
Collateral emerged as a prominent use case, reflecting the wider market focus on improving its mobility, efficiency and resilience. While the regulators intend to continue examining issuance and primary markets, the paper notes that feedback was focussed on the benefits of tokenisation that will arise in secondary markets and post-trade processes. As with other aspects of digital assets, issuance, secondary markets and post-trade processes cannot operate effectively in isolation; fragmented or siloed approaches may undermine interoperability and limit efficiency.
Regulatory approach
The regulators remain technology-neutral, applying a “same risk, same regulatory outcome” approach. They expect a prolonged period of co-existence between tokenised and traditional markets. The regulators reaffirmed that all regulated activities must have an identifiable, accountable regulated person; DeFi software providers may support financial services, but regulated firms must retain responsibility for outcomes including operational resilience and KYC compliance. The critical third parties regime will continue to apply in tokenised markets. The regulators also stressed that investors must retain recourse when assets are lost or stolen, and highlighted emerging risks from decentralised infrastructure including bridge vulnerabilities, oracle providers and wallet security.
Tokenisation Roadmap
The call for input set out an initial framework for the Tokenisation Roadmap, which is due to be published this year. Feedback again emphasised the need for greater progress, clear timeframes and scalability as the market moves from exploring use cases to developing functional digital markets alongside existing infrastructure. The paper acknowledges these points and the regulators intend to address these in the Roadmap as far as possible, while recognising that progress will also depend on effective industry collaboration. On the key topics of collateral, prudential treatment, post-trade and settlement finality, interoperability and custody, the FCA and BoE set out some specific targets and initiatives (some of which have already been announced), in addition to timelines which will be confirmed in the Roadmap:
- the regulators will publish a supervisory statement and discussion paper on central counterparty collateral later this year;
- confirmation that stablecoins can now be used as settlement assets by firms in the digital securities sandbox (subject to certain conditions). The BoE’s systemic stablecoin policy statement has provided a code of practice for systemic issuers, while the FCA published a policy statement on UK-issued stablecoins and will be consulting on resolution and insolvency for stablecoin issuers and cryptoasset custodians;
- the BoE is developing a synchronisation service for settlement in central bank money (targeted for 2028) and consulting on extending RTGS and CHAPS settlement hours to near-24/7;
- the regulators will support the work of the Wholesale Digital Markets Champion on international cooperation and interoperability in particular (through action group 2); and
- the FCA plans to consult on rules for safeguarding relevant specified investment cryptoassets in H1 2027.
A further theme in the feedback was strong industry interest in advancing the use of tokenised gold in digital markets, reflecting gold’s importance to the financial system, its potential applications and London’s longstanding role as a leading centre for gold trading. As a result, in tandem with the feedback statement, the FCA also published a call for input on tokenised gold.
FCA call for input on tokenised gold: opportunities and risks for UK wholesale markets
The call for input considers whether tokenisation could make physical gold easier to transfer and mobilise in wholesale markets. Echoing the feedback statement, it highlights collateral as a key use case, with tokenised gold having significant potential in terms of supporting the evolution of securities lending, repo and derivatives markets.
Given the UK’s established position as a global centre for gold trading, this is a natural area for development. However, with significant activity in this vein already well under way in the APAC region, work in this area is particularly important in terms of maintaining the UK’s competitiveness. Any tokenised gold framework will also need robust design with clarity as to the legal and regulatory treatment of such assets, including certainty on contractual and insolvency issues and on the responsibilities of operators and market participants.
The FCA states that it is not considering changes to the regulatory perimeter in so far as “[its] objective is not to regulate the segments of the gold trading market that are currently outside of our regulatory perimeter”, and expects that developments will, in the main, be industry led. Nevertheless, gold’s distinctive characteristics mean that clear regulatory treatment will be essential if tokenisation is to develop effectively within UK markets and the FCA is open to the possibility of regulator engagement in five ways:
- publishing guidance on good and poor practice;
- clarification of existing rules and expectations as they should be applied in the context of tokenised gold;
- with HM Treasury, developing a specific regulatory classification for gold tokens meeting certain criteria;
- with HM Treasury, consideration of areas legislation or regulatory rules may require targeted changes to accommodate gold tokenisation developments;
- with HM Treasury and the BoE, consideration of a regime specifically for tokenised gold.
The call for input includes a chapter specifically on industry feedback that progress in this space has been limited due to a lack of regulatory clarity as to whether tokenising gold can trip the alternative investment fund and/or collective investment scheme perimeters. In this specific area, the FCA raises two potential policy options: (i) clarifying the existing perimeter and FCA expectations; and (ii) developing a targeted exemption to the collective investment scheme and alternative investment fund rules specifically, if this is found to be needed. This would be separate from the work that has already been carried out in relation to fund tokenisation and ongoing work in relation to UK AIFMD.
The deadline for comments on the call for input on gold tokenisation is 23 October 2026.
