FCA and Bank of England Target Permanent Tokenised Markets on Back of 123 Industry Responses - Finance Magnates

UK regulators have moved a step closer to embedding tokenised markets in the permanent regulatory framework. The Financial Conduct Authority and the Bank of England confirmed the direction after reviewing 123 industry responses to their joint consultation on digital securities and tokenised settlement. The volume of feedback suggests broad engagement from banks, market infrastructures and technology providers rather than a narrow fintech niche.

Tokenisation refers to representing traditional assets — bonds, equities, fund units — as digital tokens that can be issued, traded and settled using distributed ledger technology. Proponents argue this can shorten settlement cycles, reduce reconciliation costs and widen access. The regulators' focus on a durable regime, rather than a time-limited sandbox, signals that tokenised trading and settlement could eventually sit alongside conventional market plumbing under the same supervisory expectations.

What to watch: the final rules and their timing, how existing settlement systems adapt, and whether pilot activity converts into live, regulated venues. For market participants, the practical questions are custody, legal finality of settlement, and interoperability with current infrastructure. The direction of travel is clearer; the operational detail is not yet settled.