Bank of England to Focus on Tokenisation

Bank of England to modernise economy with tokenisation focus.

The Bank of England will focus its future strategy on RWA to modernise the country’s economic sector. This was stated by Deputy Governor for Financial Stability, Sarah Breeden.

At the City Week 2026 conference in London, the official explained that the retail payment system of the future should include various interchangeable forms of money—tokenised deposits, stablecoins, and possibly a central bank digital currency (CBDC).

According to her, distributed ledger technology will reduce costs and speed up payments, with fewer intermediaries. Smart contracts will add flexibility by setting conditions and automating processes.

She also noted that the regulator actively supports the implementation of AI, including agent payments and commerce.

Next month, the Bank of England will publish draft rules for systemic ‘stablecoins’ and approve them by the end of the year, Breeden noted. To mitigate the risks of rapid spread of such assets, the regulator may temporarily limit their issuance volume.

Regulator’s Plans

On May 18, the Bank of England and FCA launched a joint consultation on the tokenisation programme. At its core is the Digital Securities Sandbox, which began in 2024 and will run until January 2029. The platform allows companies to launch trading systems and settlements for tokenised securities.

Since the end of 2026, 16 companies, including Euroclear, HSBC, and London Stock Exchange Group, are preparing to join the sandbox.

“The prudential regime for UK banks on tokenised assets will be the same as for non-tokenised counterparts if legal rights are identical and risks are comparable,” said Breeden.

Additionally, the Bank of England will continue to support the Digital Gilt initiative—a pilot project for tokenised sovereign bonds.

The results of the CBDC design phase will be presented by the regulator by the end of the year.

“The task of the authorities, government, and industry is to build on the UK’s strong foundation and demonstrate that we are deepening the tokenised financial ecosystem,” Breeden noted.

The approach of the British authorities aligns with global trends. On May 19, Japan’s ruling Liberal Democratic Party officially established a course for building the financial system of the future using AI and blockchain, with a focus on tokenisation, stablecoins, and agent commerce.

In April, the UK Treasury announced plans to introduce ‘stablecoins’ into the payment sector.