UK Wants Tokenized Money Flowing Through Its Pipes — And Regulators Just Opened the Tap 🚰

HM Treasury, on behalf of the Payments Vision Delivery Committee, said in a Thursday update to the government's retail payments roadmap that tokenization and "new forms of digital money" should sit at the core of the country's future payment infrastructure, with the goal of building a "diverse multi-money ecosystem." The document expands on the November National Payments Vision, calling for infrastructure that lets emerging forms of digital money interact with traditional payment systems. It names "programmable payments, including those that rely on tokenization," as potential "product-level arrangements" that may support payment innovation in the UK.

The blueprint follows an April 21 announcement by HM Treasury and Economic Secretary to the Treasury Lucy Rigby, which said the government would revisit its payments rulebook to back stablecoins, tokenized deposits, and tokenization under a single framework covering traditional and tokenized payments. In May, the Bank of England proposed extending operating hours of its core settlement infrastructure toward near-24/7 availability to prepare UK wholesale markets for tokenized finance and cross-border settlement. The BoE is accepting public feedback on the proposal until July 3 and plans to publish a feedback statement in the summer.

Crypto firms will need FCA authorization to operate in the UK under the new framework, which covers trading platforms, custodians, stablecoin issuers, staking companies, and other intermediaries. The licensing window runs from September to Feb. 28, 2027, and the regime goes live on Oct. 25, 2027. Earlier this week, the FCA also said tokenization and distributed ledger technologies could make fund management more efficient and support innovation in the UK's asset management sector, publishing a call for input on tokenization in UK wholesale markets.