The UK's financial watchdog and central bank have released a roadmap for tokenization, laying out plans to integrate stablecoins into institutional settlement and shift the payments network toward 24/7 operation. The joint initiative marks a concrete step in the country's push to modernize its financial infrastructure.
Stablecoins for institutional settlement
Under the roadmap, stablecoins — digital assets pegged to traditional currencies — would be authorized for use in settlement between financial institutions. The regulators see them as a way to speed up transactions and reduce costs in wholesale markets. The plan does not yet extend to retail use or consumer-facing stablecoin payments.
The roadmap also calls for a common standard to ensure different tokenized assets can work together across platforms. That includes rules on legal recognition and custody of digital assets held by institutions.
Phased transition to 24/7 payments
Alongside the stablecoin plan, the regulators outlined a phased approach to making the UK's payments network operate around the clock. Currently, real-time gross settlement systems run only during business hours. The transition would happen in stages, starting with extended hours for certain transaction types before moving to full 24/7 availability.
The timeline for each phase hasn't been set. The regulators said they will consult with industry participants before moving forward. They also noted that the shift will require changes to existing infrastructure and risk management practices.
What the roadmap means for market participants
Banks and other financial firms will need to prepare for the changes. The roadmap signals that the UK wants to stay competitive with other financial centers that are already experimenting with tokenized assets and round-the-clock payments. But it also comes with compliance requirements — firms will have to meet new standards for reporting and data security.
The regulators emphasized that the roadmap is a starting point, not a final set of rules. They plan to issue detailed proposals for each element over the next year. Market participants have been invited to submit feedback during the consultation period.
No specific deadlines have been announced for when stablecoin settlement or 24/7 payments will go live. The next step is for the regulators to release draft regulations, which are expected later this year.
