Tokenised CCP collateral must meet existing risk standards
Tokenised collateral would remain subject to existing eligibility and approval standards under Bank of England (BoE) proposals for central counterparties. Responses are due by February 12, 2027; the eligible asset list would not change.
Same standards across different ledgers
The BoE proposes supervisory expectations for central counterparties (CCPs) accepting tokenised versions of eligible collateral for margin and default fund contributions.
The proposals cover UK CCPs and recognised overseas CCPs deemed systemically important, or potentially so, to UK financial stability.
They clarify existing requirements rather than create a separate regime or new obligations.
CCPs must assess liquidity, valuation, interoperability, credit and concentration risk, settlement finality, operational resilience and custody.
New collateral, including tokenised versions with different delivery mechanisms or risk profiles, remains subject to notification and, where required, permission.
Acceptance would remain voluntary.
Government bonds first, broader assets later
Tokenised government bonds are a central use case.
The BoE also seeks evidence on stablecoins, tokenised money market fund units and tokenised gold, without proposing broader eligibility.
Stablecoins would require a rule change or permission to waive or modify rules, alongside other approvals.
Redemption barriers matter for fund units; gold must retain qualifying links to allocated bullion.
Separately, the BoE targets 2028 for a synchronisation service connecting digital asset ledgers with central bank money in its real-time gross settlement accounts.
Speed does not guarantee liquidity
The BoE warns that faster collateral transfers do not guarantee reliable liquidation under stress.
Automation can synchronise liquidity demands and reduce time for intervention.
CCPs must demonstrate enforceable ownership and continued access to collateral despite technology or service-provider failures.
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