Bank of England opens consultation on tokenized collateral for clearing

The Bank of England has initiated a consultation regarding tokenized collateral for clearing operations.

Under the guidance proposed by the Bank of England, central counterparties must demonstrate that tokenized collateral satisfies established liquidity and risk assessments.

Government bonds are cited as a primary illustration within this proposed guidance framework.

However, the use of tokenized money market funds is noted as a subject requiring additional feedback.

The deadline for submitting responses to this consultation is February 12, 2027.