Bank of England asks how tokenized collateral can clear the paperwork without missing the margin call

The Bank of England has opened a consultation on central counterparty (CCP) applications for digital versions of eligible collateral, saying existing rules permit their use when the assets meet relevant clearing standards. The consultation also covers collateral already accepted by CCPs and qualifying asset types included in the proposed UK CCP Rulebook but not currently in use.

A draft supervisory statement would set out what CCPs must address when seeking approval under the current process without creating new regulatory obligations. Tokenized collateral must remain capable of being valued, transferred and realized, including under stressed conditions, while faster movement across jurisdictions could help firms meet margin calls.

“Through today’s consultation, the Bank is further delivering its secondary objective for innovation in financial market infrastructure, while maintaining financial stability. It’s part of a major agenda between authorities and industry to enable the responsible adoption of tokenisation in financial markets,” Sarah Breeden, deputy governor for financial stability, said.

The consultation paper closes Feb. 12, 2027. The Bank of England expects to publish its policy response and rules later this quarter. In related Crypto News Room coverage, a magazine feature examines how private, fast USDT could arrive on Bitcoin ($BTC) and compete with Ethereum and Tron.