The Financial Conduct Authority and the Bank of England are asking for industry feedback on new guidance for tokenization. At the same time, the two regulators want to push the country's core payment settlement system toward near-24/7 operation.
What the guidance covers
The proposed rulebook lays out how tokens—digital representations of traditional assets—should be treated under existing financial regulations. It aims to provide clarity for firms experimenting with tokenized securities, deposits, or other instruments. The FCA and the Bank say the guidance is meant to support innovation without creating new risks to stability or consumer protection.
The document touches on legal certainty, custody, and how tokenized assets interact with existing payment and settlement infrastructure. The regulators are particularly interested in how a 24/7 operating model would affect risk management, liquidity, and operational resilience.
Why the push for longer hours
Right now, the UK's real-time gross settlement system, known as CHAPS, runs only on business days during set hours. The Bank of England has been exploring an extension for years, but the growth of digital assets and tokenized markets has added urgency. If settlement windows stay limited, tokenized transactions could face delays or require costly workarounds.
The regulators say a near-24/7 system would better align with global markets and the always-on nature of crypto and tokenized assets. They're not committing to a specific timetable yet; the feedback period will help decide how fast—or whether—to move forward.
Who's being asked to weigh in
The call for feedback is open to banks, fintechs, infrastructure providers, and any other interested parties. The deadline for submissions is June 12, 2025. After that, the FCA and the Bank will analyze responses and publish a summary, likely followed by a formal consultation on final rules.
The regulators have stressed that they want practical input—not theoretical praise. They're asking firms to flag specific frictions they've encountered with tokenization under current rules, and to suggest how a 24/7 settlement schedule could work without straining the system.
What happens next
The feedback deadline is June 12. After that, the FCA and Bank of England will decide whether to move ahead with a formal rule change for tokenization and whether to set a target date for extended settlement hours. Both changes would require secondary legislation or amendments to existing regulatory frameworks.
No decisions have been made yet. The industry's responses will shape the final proposals.
