Bank of England sets out approach to tokenised collateral in central clearing

The Bank of England has today launched a consultation supporting central counterparties (CCPs) acceptance of tokenised forms of eligible collateral. Tokenisation could offer opportunities for quicker and more efficient mobilisation and management of collateral, including across jurisdictions. This could support firms to respond more effectively to margin calls, improve collateral management and support innovation in central clearing, contributing to the UK's wholesale digital financial markets strategy. The Bank considers the existing regulatory framework is not a barrier for CCPs accepting tokenised forms of eligible collateral, provided the collateral meets the standards required in central clearing.