Bank of England seeks views on tokenised collateral for clearing

The Bank of England has opened a consultation on whether central counterparties should accept tokenised forms of eligible collateral. The Bank says tokenisation could allow collateral to be mobilised and managed more quickly across different jurisdictions. It states that the current regulatory framework does not stand in the way provided the collateral meets central clearing standards. Sarah Breeden, Deputy Governor for Financial Stability, said the consultation supports the Bank's secondary objective of fostering innovation in financial market infrastructure while preserving financial stability. The consultation closes on 12 February 2027.