UK Tokenisation Roadmap: The FCA and Bank of England’s Market Infrastructure Test
A tokenised security is only the beginning. The UK’s regulators must decide how cash, custody, legal rights and trading fit together before experiments can become real markets. Their roadmap promises direction, not a launch licence. Here are the decisions that will determine whether tokenisation delivers efficiency—or simply adds infrastructure.
London, England
Oct 6, 2026
The UK’s next step towards tokenised wholesale markets is a roadmap, not a new operating licence. The Financial Conduct Authority plans to work with the Bank of England on how markets should adapt to distributed-ledger technology—a commitment whose commercial significance will depend on the details: which activities can change, what safeguards apply and how firms move beyond controlled testing.
Jon Relleen, the FCA’s director of infrastructure and exchanges, outlined the initiative in his speech on reforming UK capital markets on October 5, 2026. The announcement did not set out the roadmap’s scope, publication timetable or preferred market structure. For exchanges, custodians and institutional investors, it signals a policy direction rather than a settled basis for deployment.
The distinction matters because issuing a token is not the same as creating a functioning market. A security recorded on a distributed ledger still needs enforceable ownership rights, dependable custody, buyers and sellers, and a way to exchange the asset for cash. The investment case rests on whether the whole transaction becomes cheaper or more useful—not whether one stage can be demonstrated on new technology.
From trials to functioning markets
Relleen placed the roadmap alongside work on tokenised funds, the Digital Securities Sandbox and a regulatory framework for qualifying stablecoins being developed with HM Treasury and the Bank. These initiatives have potential connections, but they are not interchangeable. Rules for a fund’s units do not settle the obligations of a trading venue, and a framework for a digital payment instrument does not by itself establish how securities transactions become legally final.
The roadmap is also distinct from the FCA and Bank’s earlier joint feedback exercise on wholesale-market tokenisation. Gathering views on opportunities and risks is one stage; deciding how infrastructure should evolve is another. The new announcement does not, on its own, change firms’ permissions or commit the regulators to a particular technical model.
The existing Digital Securities Sandbox provides a practical testing ground. Jointly operated by the FCA and the Bank, it allows firms to explore digital-securities infrastructure under modified requirements and regulatory supervision. The Bank’s sandbox materials explain its role in the regime.
The important question is how evidence from those tests translates into durable rules. A successful trial can show that a process works under specified conditions. It does not necessarily show that the same arrangement can accommodate larger transaction volumes, multiple intermediaries or a participant’s failure—and sandbox participation is not blanket permission to operate outside its conditions.
The cash leg is as important as the token
One of the roadmap’s most consequential choices will concern settlement. Moving a tokenised security is only half a securities transaction; the buyer must also deliver money. If the asset moves on a ledger while payment remains in a separate system, firms still need to coordinate the two and manage the risk that one transfer completes without the other.
Linking delivery and payment can reduce that exposure. But the choice of settlement asset introduces its own questions about credit risk, redemption, access and liquidity. Central bank money, commercial bank money and stablecoins do not offer identical claims or protections. Progress on stablecoin regulation may support some models without resolving every requirement of wholesale securities settlement.
Faster settlement also brings trade-offs. Shortening the interval between a trade and its completion can reduce outstanding exposures, but it can require participants to obtain cash or securities sooner. If a model replaces netted obligations with more transaction-by-transaction settlement, it may increase funding needs even while simplifying other processes. The relevant measure is the total cost and risk of the arrangement, not speed alone.
Legal certainty, liquidity and accountability
A ledger entry cannot answer every legal question about a security. Participants need to know what the record establishes, when a transfer becomes irrevocable and how their rights hold up if an issuer, intermediary or infrastructure operator becomes insolvent. Technical confirmation and legal settlement finality are related, but they are not the same thing.
Custody raises similarly concrete issues. Institutions need arrangements for safeguarding access credentials, authorising transfers and recovering from errors or compromised systems. They also need clarity about which entity is responsible when something goes wrong. Distributing the technology does not eliminate the need to assign liability.
Trading venues face a different test: whether tokenisation improves liquidity or fragments it. A security available on an isolated platform may be straightforward to issue but difficult to trade, finance or transfer elsewhere. Market makers need reliable access to inventory and funding; investors need confidence that they can exit positions without excessive cost.
Interoperability therefore means more than connecting software. Separate systems must be able to recognise participants, reconcile records and give transfers a consistent legal effect. Otherwise, new ledgers could recreate existing reconciliation burdens while adding another layer of infrastructure expense.
Governance will be equally important. Someone must control software upgrades, admission standards, incident response and business continuity. Trading venues will still need effective surveillance and conflict controls. The strongest case for tokenisation is not that these responsibilities disappear, but that they can be discharged more efficiently without weakening market integrity.
The roadmap’s value will lie in turning those dependencies into a credible sequence: what can operate under existing rules, what needs testing and what requires regulatory or legislative change. For firms deciding where to commit capital, that would be more useful than a broad endorsement of distributed ledgers. The real milestone is not another tokenised issuance. It is a market in which institutions can trade, fund, hold and settle those assets with dependable rights and competitive costs.