UK wholesale market tokenisation: from pilots to production
In short: UK wholesale market tokenisation is moving from pilots to production. On 18 May 2026 the FCA and the Bank of England published a joint Call for Input, building on the live Digital Securities Sandbox and the finalised fund tokenisation rules in PS26/7. Firms can already issue, trade and settle tokenised securities in a dual-regulated environment. Responses close on 3 July 2026.
If a firm issues, trades or settles securities in the UK, the way it does so is set to change. Tokenisation lets a bond, a share or a fund unit exist as a digital record on a shared ledger, rather than passing through a chain of separate registers and settlement systems. On 18 May 2026 the FCA and the Bank of England set out a shared vision for how that shift can happen safely in wholesale markets, and asked the industry to respond by 3 July 2026. The message to firms is that the regulators want UK wholesale market tokenisation to move from pilots to production, and they are asking how to clear the path.
What the Call for Input covers
The Call for Input sets out a joint vision, a set of principles and an initial roadmap for tokenisation across UK wholesale markets. Tokenisation is the digital representation of an asset and its ownership using distributed ledger technology. The FCA and the Bank, working with the Prudential Regulation Authority (PRA), want views on where existing rules and infrastructure support the safe use of the technology and where they constrain it. The focus is on tokenised securities such as bonds, equities and fund units, with other asset types to follow.
The exercise is aimed at the firms that operate across wholesale markets: banks, investment firms and asset managers; financial market infrastructure providers such as central securities depositories and central counterparties; trading venues and post-trade providers; and the technology firms building tokenisation tools. It builds on the government’s Wholesale Financial Markets Digital Strategy and supports the newly appointed Wholesale Digital Markets Champion. A response statement is due over the summer, with a full cross-authority roadmap to follow later in 2026.
How the sandbox turns clarity into live activity
The Digital Securities Sandbox gives the vision a live footing. It is a regulated environment in which firms can issue, trade and settle real tokenised securities, created by the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023 (SI 2023/1398), the first financial market infrastructure sandbox made under the Financial Services and Markets Act 2023. Sixteen firms are now working through it on the live issuance and settlement of tokenised assets.
The sandbox runs as a series of gates, with permitted activity rising at each stage and a path towards full authorisation as a digital securities depository if a permanent regime follows. The regulators’ approach, including temporary modifications to the UK CSDR, the Financial Services and Markets Act 2000, the Companies Act 2006 and the Uncertificated Securities Regulations 2001, is set out in their joint policy statement PS24/12. The sandbox is operational until December 2028 and can be extended, with the application window expected to close around March 2027. The structure matters: it lets firms scale real volumes while the regulators learn what a permanent regime should look like.
What UK wholesale market tokenisation means for firms
Tokenisation reaches the whole settlement chain, not just issuance. Alongside the Call for Input, the Bank of England has consulted on extending RTGS and CHAPS settlement hours towards near 24/7 settlement, and has committed to launch a live synchronisation service targeted for 2028. It is also working to let tokenised equivalents of already eligible assets serve as collateral at central counterparties and in its own operations, and is supporting HM Treasury’s pilot issuance of a digital gilt instrument. Our note on financial market infrastructure supervision explains who regulates the CCPs, exchanges and CSDs at the centre of this chain.
The PRA and the FCA are moving the prudential and conduct rules in step. The PRA has issued Dear CEO letters on the prudential treatment of tokenised asset exposures and on innovations in deposits, e-money and stablecoins. The FCA is considering how its client asset (CASS) rules should evolve, and has already moved fund tokenisation forward through PS26/7, which adds an optional direct-to-fund model and guidance for keeping the unitholder register on a ledger. Firms weighing entry should scope the regulatory perimeter before anything else; our regulatory perimeter and market entry page sets out how we scope that work.
| Authority | What it has done | Where to find it |
|---|---|---|
| FCA and Bank of England | Published the joint Call for Input on tokenisation in wholesale markets on 18 May 2026; responses close 3 July 2026 | Call for Input |
| FCA | Finalised fund tokenisation guidance, with a direct-to-fund model and ledger register guidance, in PS26/7 on 30 April 2026 | PS26/7 |
| Bank of England | Consulted on near 24/7 RTGS and CHAPS settlement and committed to a synchronisation service targeted for 2028 | BoE RTGS roadmap |
| PRA | Set expectations on the prudential treatment of tokenised assets, stablecoins and cryptoasset exposures through Dear CEO letters | PRA Dear CEO letters |
| HM Treasury | Backed the Wholesale Financial Markets Digital Strategy and a pilot digital gilt instrument | WFMDS |
The questions the roadmap still has to answer
The vision is clear, but it does not yet resolve the legal foundations. The Call for Input opens a discussion on prudential treatment, tokenised collateral and the settlement instrument, and the FCA’s commitment on CASS is to consider how the rules may evolve rather than to confirm where they land. Questions of settlement finality, the legal status of the settlement asset and custody of tokenised holdings are signposted for the cross-authority roadmap later in 2026, not answered now. The sandbox is a permissioned regime with eligibility and prudential conditions, so it is a controlled path rather than an open door. Our analysis of the Bank of England’s dual-track regime for stablecoins and the digital gilt sits alongside this, and the wider direction is set out in the FCA’s 2026 work programme.
Viewpoint
UK wholesale market tokenisation has reached the point where the regulatory direction is settled enough to plan around. The FCA and the Bank have committed real infrastructure, a live sandbox carrying sixteen firms, finalised fund rules in PS26/7 and a synchronisation service with a 2028 target, which is a stronger signal than a consultation alone. The binding constraint at this stage is rarely the headline technology; it is the perimeter analysis, the settlement-asset question and the custody treatment, which are exactly the points the cross-authority roadmap has deferred. Firms that respond by 3 July 2026 are not just commenting on policy, they are shaping the rules that will govern the assets they intend to issue. The direction of travel is set; the detail is still open to the firms willing to engage now.
Frequently asked questions
When does the FCA and Bank of England Call for Input close?
Responses to the joint Call for Input on tokenisation in UK wholesale markets close on 3 July 2026. The FCA and the Bank of England expect to publish a response statement over the summer and a full cross-authority roadmap for digital wholesale markets later in 2026.
What is the Digital Securities Sandbox?
The Digital Securities Sandbox is a regulated environment, created by SI 2023/1398 under the Financial Services and Markets Act 2023, in which firms can issue, trade and settle real tokenised securities. It runs through a series of gates to December 2028, with a possible path to full authorisation as a digital securities depository if a permanent regime follows, and sixteen firms are currently working through it.
Is wholesale market tokenisation the same as crypto?
No. The Call for Input concerns tokenised securities such as bonds, equities and fund units issued on distributed ledger technology, governed by existing securities and market infrastructure law. It is a change to the plumbing of regulated markets rather than a new class of unbacked digital asset.
How we can help
If you are preparing a response to the Call for Input, scoping a Digital Securities Sandbox application, or assessing how tokenisation affects your settlement and custody arrangements, contact Rob Bratby at Bratby Law.
