UK Moves Tokenisation From Sandbox Pitch to Market Infrastructure: FCA and Bank of England Publish Joint Vision

The most important word in the joint FCA-Bank of England statement published on May 18 was "confidence." UK firms, the two regulators said, can now adopt tokenisation and distributed ledger technology with greater confidence — language that, in regulator-speak, is the difference between a sandbox experiment and a market-infrastructure decision. After three years of pilots, the Edinburgh Reforms, the Digital Securities Sandbox, and a fund-tokenisation policy statement that took effect just last month, the UK is now publicly committing to a wholesale-market architecture in which tokenised assets are not the exception but a permitted, settled, collateralised norm. The pilot framing is over. The market-infrastructure framing has begun.

What the joint vision actually commits to

The shared vision is not a binding rulebook — it is a strategic statement, paired with a Call for Input. But it is materially more than a discussion paper, and it sits inside a stack of UK regulatory artefacts that have steadily compounded over the past three years: the Edinburgh Reforms (December 2022), the FMI Sandbox legal gateway, the Digital Securities Sandbox launched in 2024, CP25/28 on Progressing Fund Tokenisation (October 2025), and PS26/7 (April 2026), which made the Direct-to-Fund tokenised model a real operating option. The May 18 publication ties those pieces together and extends them to wholesale markets — equities, bonds, repo, and the collateral and settlement plumbing underneath.

Three concrete commitments stand out. First, the Bank of England is targeting a live settlement synchronisation service in 2028 — a piece of central-bank infrastructure that lets RTGS settle against assets that live on external ledgers, including DLT-based ones. That is the same architecture Sasha Mills, the Bank's Executive Director for Financial Market Infrastructure, described at the January 2026 Tokenisation Summit when she said the Bank was "designing a synchronisation interface as part of the RTGS Future Roadmap" that would "allow for the conditional settlement of funds in RTGS against assets on a variety of external ledgers — including programmable, DLT-based ledgers."

Second, the Bank is working to enable tokenised equivalents of already-eligible assets to be used as collateral, both at central counterparties and within the Bank's own operations. That is a quietly enormous commitment: collateral eligibility is the gating constraint for most institutional tokenisation use cases, because if a tokenised gilt cannot be posted at the same haircut as a traditional gilt, it cannot be used inside repo or central-clearing workflows. The shared vision moves that workstream onto a public timeline.

Third, Simon Walls and Sarah Breeden — the named officials — explicitly addressed prudential treatment. Walls said tokenisation "has the potential to transform wholesale markets — reshaping how assets are issued, traded and settled." Breeden, speaking for the Bank, said the two authorities have done "a huge amount to enable the responsible adoption of tokenisation in retail and wholesale finance in the UK." Together with the parallel consultation on extending RTGS and CHAPS hours toward near-24x7 settlement — published the same day — the May 18 release effectively bundles three workstreams (tokenised securities, central-bank-money settlement, and operating hours) into a single policy posture.

The 16-firm Digital Securities Sandbox is the proof point

The Call for Input is credible because it sits on top of a working sandbox. The DSS now has 16 firms operating under a modified regulatory regime, doing live issuance and settlement of digital securities under the BoE/FCA Joint Approach framework. That is the basis on which the regulators can credibly say firms can move with confidence: there are now real institutions that have stress-tested tokenised market activity inside UK regulatory perimeters, and the proof point is operational rather than theoretical.

The fund-tokenisation track is the other piece that gives the May 18 publication its weight. PS26/7, which took effect on April 30, 2026, locked in the Direct-to-Fund tokenised model — the architecture in which fund units exist as tokens on a ledger and can be issued, traded, and redeemed without the layered intermediation of legacy fund administration. That is the same building block DTCC and Chainlink are deploying in the US for collateral, and it is the use case that the asset-management industry has been pushing hardest in Brussels and Washington. The UK is the first major jurisdiction to have an enforceable framework for it.

The Bank's parallel work on a sterling-denominated systemic stablecoin regime — out for consultation since November 2025 — is the third anchor. Settled central-bank money for wholesale tokenised activity, plus a regulated commercial-bank-money stablecoin, plus a sterling tokenised-deposit framework are the three legs of what the Bank now calls a "multi-money ecosystem." That is the framing under which May 18's vision moves from incremental policy to a market-structure thesis.

Where the UK now stands against the EU and Singapore

The most useful way to read the May 18 publication is comparatively. The EU's DLT Pilot Regime, live since March 2023 and recently extended to 2028, is materially narrower than the UK's framework — it caps issuance sizes, restricts the assets that can be tokenised, and constrains the operator types that can run market infrastructure. EU regulators have been clear they want to extend the regime, but the politics of doing so across 27 member states is slow. Singapore's Project Guardian has been running tokenised collateral, FX, and asset-management pilots since 2022 with the MAS, but it remains a use-case-by-use-case sandbox rather than a wholesale-market framework. The UK is now offering broader scope than the EU and more institutional depth than Singapore — with central-bank-money settlement on the table, which neither competitor has publicly committed to on a similar timeline.

The US is the more interesting comparison. DTCC's Smart NAV work with Chainlink, the SEC's evolving stance, and the OCC's recent move to grant national trust charters to Circle, Ripple, Paxos, and BitGo — plus the FCA's parallel positioning — together make the trans-Atlantic tokenisation race look genuinely close. But where the UK has put a single coherent regulator-authored vision in writing, the US still has a fragmented regulatory architecture in which the OCC, SEC, CFTC, FinCEN, and individual state authorities each see a different slice of the picture. London is using that gap deliberately.

What to watch: The July 3 deadline is when industry will publicly disclose what use cases it actually wants the regulators to prioritise. The interesting tells will come from the asset-management lobby (push for collateral eligibility for tokenised gilts), the exchanges (push for parity between traditional and tokenised market-making capital treatment), and the systemic banks (push for clarity on tokenised-deposit accounting versus stablecoin holdings). The summer 2026 feedback statement and the later-2026 cross-authority roadmap will turn this vision into actual regulatory drafting — and that is when global asset managers will decide whether the UK is the venue they want to host tokenised wholesale activity for the next decade.

Reviewed by Jason Lee, Founder & Editor-in-Chief, BlockAI News.

Sources

Primary sources

• FCA — Joint shared vision press release (May 18, 2026)
• BoE/FCA — Joint Approach to the Digital Securities Sandbox
• FCA — PS26/7 Progressing Fund Tokenisation
• FCA — CP25/28 Progressing Fund Tokenisation
• BoE — Sasha Mills, Tokenisation Summit speech
• @TheFCA — on tokenisation (X)

How we report: This article cites primary sources, regulatory filings, and on-chain data where available. BlockAI News uses AI tools to assist with research and first-draft generation; every article is reviewed and edited by a human editor before publication. Read our full How We Report page, Editorial Policy, AI Use Policy, and Corrections Policy.