UK Eyes Near-24/7 Settlement to Support Tokenization Push

The UK is taking a major step toward modernizing its financial markets to accommodate tokenized assets. On May 18, the Bank of England and Financial Conduct Authority (FCA) jointly proposed extending settlement infrastructure operating hours to near-24/7, aimed at preparing wholesale markets for the increasing adoption of tokenized finance.

The Bank of England’s proposal would expand the availability of its Real-Time Gross Settlement (RTGS) system and Clearing House Automated Payment System (CHAPS) to include weekends and extended daily hours. These systems currently underpin much of the UK’s financial market operations. The change seeks to support cross-border payments and emerging settlement models driven by tokenized and distributed ledger technologies (DLTs).

The public has until July 3 to provide feedback on the consultation, with a final statement expected later in the summer. This initiative aligns with the UK’s broader strategy to position itself as a global leader in digital and tokenized finance. The FCA emphasized that tokenization could improve efficiency in asset management and unlock new capital sources.

Regulatory Coordination and Market Implications

The FCA and Bank of England’s collaborative vision for tokenization reflects the UK’s ‘twin peaks’ regulatory framework, which divides responsibility between the conduct-focused FCA and the prudentially focused Bank of England. This coordinated approach is critical as tokenization blurs the lines between traditional and digital financial instruments.

Separately, the Prudential Regulation Authority (PRA), a division of the Bank of England, has updated interim guidance on tokenized financial instruments. The PRA clarified that such instruments will be treated the same as their traditional counterparts when legal rights and risks are comparable. However, a comprehensive regulatory framework isn’t expected until 2028, following the Basel Committee’s ongoing review of crypto asset exposure standards.

What This Means for Markets

The move toward near-24/7 settlement is significant for traders and institutions. Extended operating hours could reduce settlement risks, particularly for cross-border transactions, and facilitate the integration of tokenized assets into mainstream financial systems. This is especially relevant as global competition in tokenization and DLT adoption heats up.

Katie Harries, head of policy for Europe at Coinbase, highlighted the transformative potential of tokenized markets. “The opportunity is huge — not only for companies seeking new pools of capital, but for the many individuals globally who are not able to participate in capital markets today,” she told Cointelegraph.

With the FCA also consulting on a broader crypto regulatory framework—set for implementation by October 2027—the UK is clearly laying the groundwork for a comprehensive digital finance ecosystem.

What’s Next?

The Bank of England is expected to publish feedback on its settlement proposal later this year. Meanwhile, the FCA’s ongoing consultations on stablecoins, crypto custody, and staking will likely shape the regulatory landscape further. For traders, the key dates to watch are July 3, the consultation deadline, and October 2027, when the FCA’s crypto framework is slated to take effect.

As the UK accelerates its push into tokenized finance, market participants should prepare for potential shifts in liquidity, settlement efficiency, and regulatory requirements. The race to lead in digital finance is on, and the UK doesn’t plan to be left behind.

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