Tokenisation: UK payments network set for 24/7 shift, regulators say

The Bank of England and UK regulators have published a coordinated vision and initial roadmap for tokenisation in wholesale markets, signalling support for the use of stablecoins in institutional settlement and steps toward extending payment system hours. The joint call for input outlines principles to guide safe adoption of distributed ledger technology and tokenised assets.

The initiative is backed by coordinated publications from the Financial Conduct Authority (FCA), the Bank of England and the Prudential Regulation Authority (PRA), which together set out consultation papers, guidance and supervisory letters. The Bank has opened a consultation on extending Real-Time Gross Settlement (RTGS) and CHAPS settlement hours toward near-24/7 operation, while the PRA has issued “Dear CEO” letters updating expectations on prudential treatment of tokenised exposures, stablecoins and deposit innovations. These documents aim to reduce legal and operational uncertainty for firms pursuing tokenisation projects.

Market implications include potential gains in post-trade efficiency and intraday liquidity management as tokenised securities and token-based settlement models mature. Firms and market infrastructure providers are likely to accelerate pilots and technical integration if the regulatory framework provides clear safeguards on reserve backing, custody and governance. At the same time, extending settlement hours will shift how liquidity and counterparty risk are managed across the trading day.

The move fits within the UK government’s broader digital markets and payments strategy and follows prior FCA work on fund tokenisation and policy statements aimed at enabling tokenised authorised funds. International coordination—particularly on cross-border settlement, stablecoin reserve standards and market abuse safeguards—remains a central challenge as the UK charts its approach.

Analysts expect the consultation responses and industry workshops to shape specific timelines and technical standards, with phased rollouts and pilot programmes through the remainder of the year. Key watchpoints for investors and market participants include final rules on stablecoin backing and custody, the schedule for RTGS/CHAPS hour extensions, and any prudential capital or operational resilience requirements that may be imposed on banks and payment service providers.