FCA Publishes Feedback on Wholesale Tokenization and Signals Joint Roadmap With Bank of England

Key Takeaways

• The FCA has published Feedback Statement FS26/1 summarizing 123 responses to its May 2026 joint Call for Input with the Bank of England on wholesale market tokenization.
• Respondents backed the proposed approach and identified post-trade activity, especially collateral movement, as the main opportunity.
• The statement imposes no new obligations, but it previews a joint roadmap due later in 2026 and a safeguarding consultation in the first half of 2027, so compliance teams should begin planning now.

Deep Dive

The FCA has published Feedback Statement FS26/1 summarizing 123 responses to its May 2026 joint Call for Input with the Bank of England on wholesale market tokenization. Respondents backed the proposed approach and identified post-trade activity, especially collateral movement, as the main opportunity. The statement imposes no new obligations, but it previews a joint roadmap due later in 2026 and a safeguarding consultation in the first half of 2027, so compliance teams should begin planning now.

The FCA and Bank of England are treating tokenization, the digital representation of assets and ownership using distributed ledger technology (DLT), as potentially one of the most consequential changes to wholesale markets in decades. The statement is relevant to banks, investment firms, asset managers, financial market infrastructure providers (CSDs and CCPs), trading venues, post-trade service providers, and fintech firms. Industry feedback points to post-trade as the priority, so the first expectations are likely to affect settlement, collateral management, and related infrastructure.

Several next steps and timelines were set out. A joint FCA and Bank of England tokenization roadmap is expected later in 2026 and will include target dates for wholesale tokenization work. The FCA is also consulting on tokenized gold, following respondent feedback. It plans to consult on rules for safeguarding relevant specified investment cryptoassets (RSICs) in the first half of 2027. The statement does not give exact dates for these items, so teams should treat the timing as indicative and monitor for updates.

The statement sits within a wider set of initiatives. These include the Treasury's Wholesale Financial Markets Digital Strategy, the Digital Securities Sandbox (DSS), Policy Statement PS 26/7 on fund tokenization (April 2026), and PRA guidance on the prudential treatment of tokenized assets. Compliance teams should read these together, because requirements for conduct, prudential treatment, and market infrastructure will likely develop in parallel. The FCA explicitly encourages firms to keep exploring business cases for tokenized infrastructure, which suggests a supportive supervisory stance toward well-governed innovation.

Recommended actions:
- Map current or planned tokenization activity, such as collateral mobility, fund tokenization, and DSS participation, against the stakeholder categories in this statement.
- Assess whether any plans involve RSICs, and prepare for the 2027 safeguarding consultation by reviewing custody, segregation, and client asset controls.
- Coordinate with prudential, legal, technology, and operational resilience teams on the PRA guidance and PS 26/7.
- Consider contributing to upcoming consultations, including tokenized gold, and use the FCA contact channel for questions.
- Document governance, risk assessments, and business case rationale for any DLT-based initiatives.

Near-term risk is low because there are no new obligations. Strategic and regulatory-change risk is moderate, since the roadmap and the safeguarding rules could set expectations that affect system design and investment decisions. Key exposures include operational and technology risk from DLT, legal uncertainty over ownership and settlement finality, custody and safeguarding risk, and third-party dependency on technology providers. Firms that engage early and build flexible controls will be better placed when target dates are published.

Source: Financial Conduct Authority