Key facts
- The UK's Financial Conduct Authority and Bank of England published Feedback Statement FS26/1 on tokenizing wholesale markets.
- Respondents, including Hedera, BlackRock, Ripple, and Chainlink, urged regulators to move toward full production rather than temporary regimes.
- Hedera prioritized interoperability, governance, and auditability in its submission.
- The regulators confirmed the Digital Securities Sandbox permits scalable live activity and will offer a pathway to permanent authorization.
- Faster collateral mobility was cited as a key benefit of tokenization, with potential to shrink excess collateral holdings.
- The Bank of England aims to have a service for tokenized assets to settle in central bank money by 2028.
The UK's wholesale tokenization landscape is advancing, with the Financial Conduct Authority (FCA) and Bank of England publishing Feedback Statement FS26/1 on September 14. This document summarizes 123 responses to their May call for input on tokenizing wholesale markets.
Respondents, including major financial players like Hedera, BlackRock, Ripple, and Chainlink, urged regulators to move beyond temporary regimes like sandboxes and pilots toward full production. Hedera specifically emphasized the need for trust at the infrastructure layer, highlighting priorities of interoperability, governance, and auditability.
The FCA and Bank of England acknowledged the demand for regulatory clarity and confirmed that the Digital Securities Sandbox (DSS) already allows for scalable live activity, with a clear pathway to permanent authorization planned. HM Treasury also indicated plans for further Digital Gilt Instrument (DIGIT) issuances, contingent on the success of the first issuance set for Q1 2027 on HSBC Orion.
Collateral mobility emerged as a primary focus in the feedback, with participants highlighting its potential to significantly reduce the average 7% excess collateral held as a buffer. Ripple has actively supported the UK's tokenization initiatives through HM Treasury's Wholesale Digital Markets Taskforce.
The Bank of England is developing a synchronization service to enable tokenized assets to settle in central bank money, targeting completion by 2028. This aligns with the central bank's existing mandate on stablecoins and digital money, setting expectations for sterling settlement assets to underpin future wholesale infrastructure.
Hedera has a track record in UK regulated finance, with FCA-regulated exchange Archax issuing tokenized money market funds on its Token Service. In July 2025, Archax, Lloyds Banking Group, and Aberdeen conducted a UK-first FX collateral transaction using tokenized units on Hedera. The FCA also opened a separate call for input on tokenized gold, with responses due October 23, 2026, indicating a parallel development track for commodity tokenization.