- The Bank of England has opened a consultation on how central counterparties can accept tokenized versions of eligible collateral.
- A draft supervisory statement clarifies what CCPs must address in applications under the existing approval process.
- Tokenized collateral must remain capable of being valued, transferred and realized, including in stressed conditions.
- Faster movement across jurisdictions could help firms meet margin calls, the BoE said.
- The proposed guidance would not create new regulatory obligations.
The Bank of England opened a consultation on Thursday clarifying how a central counterparty can accept digital versions of eligible collateral, stating existing rules already permit the practice when assets meet clearing standards. The draft supervisory statement would detail what CCPs must address in applications under the current approval process.
The guidance covers collateral already accepted and types that qualify under the proposed UK CCP Rulebook but are not yet in use. Importantly, the bank emphasized the statement would not create new regulatory obligations.
Tokenized collateral must remain capable of being valued, transferred and realized, including in stressed conditions, according to the BoE. Consequently, firms leveraging digital assets for clearing could benefit from faster movement across jurisdictions, potentially helping them meet margin calls more efficiently.
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