On 29 October 2026, the Bank of England published a consultation paper seeking views on draft supervisory expectations for central counterparties (CCPs), the clearing houses that place themselves between the buyer and seller of wholesale transactions, that want to accept tokenised versions of collateral already eligible under the proposed CCP Rulebook. The paper says it focuses on tokenised collateral used to meet margin and default fund requirements, and the consultation period closes on 12 February 2027.

Why It Matters

The Bank is not proposing a separate rulebook for tokenised assets. According to the paper, the draft supervisory statement does not create a separate regulatory regime for tokenised collateral. It is meant to clarify what the Bank would expect CCPs to consider when they apply through the existing supervisory process for new collateral. The Bank’s initial view, as set out in the paper, is that the existing framework does not prevent CCPs from accepting tokenised forms of eligible collateral, under a principle of “same risk, same regulatory outcome”. Cointelegraph reported the consultation on 29 October 2026 in similar terms. The paper adds that CCPs are not mandated to accept tokenised collateral, and that a CCP seeking to accept it is expected to demonstrate, in the approval process, that it meets the criteria and can manage the risks. The paper says the expectations would apply to UK CCPs and to recognised non-UK CCPs that the Bank has determined to be, or are likely to become, systemically important to UK financial stability.

The attraction is speed. The paper says respondents pointed to near-real time collateral mobility, including moving collateral outside traditional market operating hours and across jurisdictions, and that firms noted these features could potentially support meeting margin requirements. The paper describes delays between market moves, margin calls and actual collateral delivery that can require firms to pre-position collateral or hold buffers, and it says tokenised government bonds may be one of the most impactful use cases. The same paper also flags a trade-off: collateral that moves at instant or near-instant speed can reduce the need for buffers but could leave fewer resources available to absorb shocks in difficult market conditions. Our reading is that this trade-off explains why the paper pairs the speed argument with eligibility tests rather than treating faster movement as a benefit on its own.

Speed does not settle eligibility. The paper says CCPs are required to assess factors including valuation, liquidity, transferability and the resilience of operational and custody arrangements, and that tokenisation does not, in itself, determine whether collateral is eligible. It states that “more efficient transferability in normal market conditions does not automatically equate to efficient liquidation in stress.” For a token that is a digital twin of an off-chain asset, the paper says that in stressed conditions the token could trade at a discount to the underlying asset, with implications for valuation and liquidation. Our reading is that these are the tests a tokenised asset would have to pass before it counts as usable clearing margin. The consultation does not propose changing the list of eligible collateral, though it asks for views on stablecoins, tokenised money market fund units and tokenised gold as possible future forms.

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