BoE Seeks Near 24/7 Settlement, Authorizes Tokenized Collateral

The Bank of England on May 18 opened a consultation proposing extended operating hours for RTGS and CHAPS and measures to enable tokenized assets and regulated stablecoins in core UK markets. The paper proposes adding weekend and some bank-holiday settlement windows and lengthening daily operating hours to reduce gaps in high-value payments and collateral movement.

The consultation outlines two near-term steps: an additional settlement day, likely Sundays, plus settlement on specified UK bank holidays; and longer settlement windows on existing operating days. The Bank set a timetable that would not begin before 2029 for the additional days, with further daily lengthening not expected before 2031. Longer-term options under review include a 22×6 schedule and a near-continuous 23.5×7 CHAPS model.

The Bank committed to launch a live synchronization service targeted for 2028 to enable tokenized versions of eligible assets to be used as collateral with central counterparties and in central bank operations. The synchronization interface is designed to allow the asset leg and cash leg of transactions to settle conditionally and simultaneously on a ledger, reducing timing mismatches that limit the use of tokenized assets in regulated markets.

Regulators are coordinating the proposals. The Bank and the Financial Conduct Authority published a joint tokenization vision with shared principles for digital wholesale markets. The Prudential Regulation Authority issued updated guidance on tokenized asset exposures and on innovations in deposits, e-money and stablecoins. The PRA signaled a “proportionate approach” to wholesale stablecoins and invited early engagement from banks considering issuance for wholesale customers.

The Bank and the FCA are running a Digital Securities Sandbox with 16 firms to test live issuance and settlement of tokenized assets through early 2029. HM Treasury’s pilot digital gilt, DIGIT, is operating inside the sandbox. Authorities plan to expand testing to include regulated stablecoins as they evaluate a multi-money environment where stablecoins, tokenized bank deposits and central bank money operate on compatible rails.

Extended settlement hours and tokenized collateral could change how firms manage liquidity. Current settlement pauses force institutions to hold precautionary liquidity buffers for overnight and weekend exposures. More frequent settlement and tokenized equivalents of eligible assets could allow collateral to move more frequently and reduce those buffers. Policy guidance on how tokenized collateral will qualify under UK EMIR is expected later this year.

The consultation identifies operational and systemic risks. Extended hours increase operational complexity and potential cyber exposures, and they affect the timing of reserve requirements and interest calculations. The synchronization interface will need to meet RTGS-grade resilience standards. Regulators say new liquidity management rules and testing will be required to prevent unintended consequences.

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 were enacted in February, creating a statutory framework for cryptoasset activities that is expected to take effect in October 2027. The FCA has selected firms to test stablecoin products across payments, wholesale settlement and trading use cases, and several companies are trialing pound-denominated stablecoin projects inside regulatory sandboxes.

Industry feedback on sequencing and operational design is due by July 3. The Bank plans industry workshops, a summer feedback statement and a cross-authority digital wholesale market roadmap before the end of the year. The consultation sets timelines and technical questions for a staged shift from current business-hours settlement to a market architecture that can support tokenized assets and near round-the-clock liquidity movement.