The Bank of England is pushing ahead with plans to bring tokenization into the UK's financial markets. It's proposing near-24/7 settlement hours and revisiting limits on stablecoins. The goal: sharpen the country's edge in digital assets.
Tokenization push
Tokenization — converting assets like bonds or money into digital tokens on a blockchain — has been a talking point in finance for years. The Bank's latest move signals it's ready to move beyond talk. It wants to make settlement faster and more flexible. Tokenization could cut out layers of intermediaries and let trades settle almost instantly. That's a big shift from the current system, where some transactions take days to clear.
Round-the-clock settlement on the table
The Bank proposes extending settlement hours to nearly 24/7. Today, most UK settlement happens in a narrow window. A near-24/7 system would let trades finalize at any time, reducing risk and speeding up capital flows. It's a change that market participants have been asking for, especially as trading goes global and after-hours activity grows. The Bank hasn't detailed a timeline, but the proposal is now out for consultation.
Stablecoin limits get a second look
Stablecoins — digital currencies pegged to traditional assets — are also back in the Bank's sights. Regulators are revisiting limits that some in the industry say have held back innovation. The review aims to make the UK more competitive as other jurisdictions like the European Union and the United States set their own stablecoin rules. The Bank is weighing how to allow stablecoin use in payments and settlements without risking financial stability.
These moves come as the UK government pushes to position London as a global hub for digital finance. The Bank's work on tokenization and settlement hours dovetails with broader efforts to modernize the country's financial infrastructure. Stablecoin regulation, meanwhile, has been a sticking point for crypto firms looking to operate in the UK. Loosening limits could attract more business — but it also brings risks the Bank says it will manage carefully.
The proposals are open for industry feedback. How the market responds could shape the UK's digital finance landscape for years. The Bank hasn't set a date for final rules or implementation.
