BoE Tokenised Collateral: The Draft CCP Supervisory Statement

The BoE tokenised collateral consultation, published by the Bank of England on 29 October 2026, sets out draft supervisory expectations for central counterparties (CCPs) that want to accept tokenised versions of collateral they can already take. The draft Supervisory Statement (SS) sits in Annex 1 of the paper, and responses close on 12 February 2027. The Bank’s initial view is that the existing regulatory framework does not prevent a CCP from accepting tokenised forms of eligible collateral, provided the collateral still meets the standards required in central clearing: it must remain capable of being valued, transferred and realised when needed, including in stressed conditions.

The paper adds no new obligations and keeps the supervisory notification and permission process. A CCP that wants to take a tokenised government bond still goes through that process with the Bank, and the draft SS describes what the Bank would look for in that application. For UK clearing members, a tokenised asset becomes usable as margin at a CCP only after the CCP has completed the applicable supervisory notification or permission process, determined that the asset meets the relevant eligibility and risk-management requirements, and decided to accept it. Nothing in the paper touches UK EMIR trade or margin reporting.

Related reading: CCP Collateral Tokenisation: ESMA’s Call for Evidence Due 15 January 2027

Key dates for the BoE tokenised collateral consultation

The paper gives no date for the final Supervisory Statement. Its next-steps chapter covers the response window, information-sharing arrangements with HM Treasury and the FCA, and the Bank’s wider work on tokenisation and CCP Rulebook reform.

The draft Supervisory Statement adds clarity and leaves the rules alone

The draft SS states that it does not limit, replace or amend any applicable requirements (SS paragraph 1.11), and the consultation describes it as adding clarity without introducing new regulatory obligations for CCPs (paragraph 1.7). The approach is described as proportionate, outcomes-focused and technology neutral, and the draft does not prescribe particular technologies, legal structures or operational models. The Bank’s press release frames the same idea as “same risk, same regulatory outcome”, adding that different tokenised arrangements may achieve those outcomes in different ways.

Two drafting choices matter when a CCP reads the text against its own arrangement. The expectations use “should”, and the draft says the Bank does not intend its considerations to operate as binary tests (SS paragraph 3.2). The CCP’s assessment should also rest on the evidence available at the time of application (SS paragraph 3.3), which places the weight on what the applicant can document on the day it files.

The list of eligible collateral does not move. The consultation states that it proposes no change to the existing list under the draft CCP Rulebook (paragraph 1.24), and the draft SS was developed primarily for tokenised forms of collateral that UK CCPs already treat as eligible and accept (paragraph 3.1). Respondents to the Bank’s industry engagement, including the May 2026 Call for Input, bilateral discussions and the July 2025 CCP resilience consultation, expected early adoption to focus on tokenised versions of widely accepted collateral such as government securities (paragraph 2.6), and tokenised government bonds serve as the paper’s main example.

UK EMIR today, the CCP Rulebook later: which text applies

The consultation is written largely against rules that are not yet in force. Its anchor references, the Collateral Part and the Review and Testing of Models and Parameters Part, belong to the draft UK CCP Rulebook, which the Bank consulted on in July 2025 as part of the repeal and replacement of UK EMIR. The Bank expects to publish its policy response and rules in 2026 Q4, and those rules take effect once HM Treasury repeals Titles III to V of UK EMIR (paragraph 1.4). The same paragraph says that, unless otherwise stated, the consultation’s references to the existing regulatory framework applicable to CCPs should be understood as references to the proposed UK CCP Rulebook and the draft statement of policy, so the Bank’s initial view that the existing framework does not prevent CCPs from accepting tokenised forms of eligible collateral (paragraph 1.2) should be read against those proposed texts.

Until that happens, the collateral standard sits in assimilated law. Article 46(1) of UK EMIR requires a CCP to accept highly liquid collateral with minimal credit and market risk to cover its initial and ongoing exposure to its clearing members, and Article 46(3) allows the Bank of England to make technical standards on the types of collateral, the haircuts and the conditions for bank guarantees. The legislation.gov.uk change note for Article 46 identifies its prospective revocation under Schedule 1 to the Financial Services and Markets Act 2023 as a change not yet applied.

The proposed Rulebook carries the same core test. Under the draft, CCPs may only accept collateral that is highly liquid and subject to minimal credit and market risk, and the eligible types are cash, financial instruments, bank guarantees and gold, each subject to the relevant requirements (paragraph 1.5).

The trap for anyone drafting an internal policy or a response is citing a draft Rulebook Part as if it already binds. My reading is that an application lodged before the Rulebook commences would be assessed under UK EMIR and its technical standards, with the draft SS as the Bank’s statement of how it approaches the risk questions. The consultation does not say this in terms, so a CCP planning a filing in early 2027 should confirm the governing text with its supervisor.

The approval route: notification, permission and the draft statement of policy

The Bank’s initial view on the framework is easy to over-read. Under the proposed framework, a CCP would notify the Bank of changes to its collateral risk model and would need separate permission where a change is assessed as material (consultation paragraphs 1.6 and 1.22; draft SS paragraph 3.2). The distinction between notification and permission is set out in the July 2025 draft statement of policy on supervisory processes and margin permissions. The paper treats a tokenised version of already-eligible collateral as something a CCP applies to accept through the existing supervisory process (paragraph 1.1). The Bank also encourages firms actively considering tokenised collateral to engage with it on potential proposals (paragraph 1.3).

The process itself sits in the draft statement of policy on the Bank’s approach to supervisory processes and margin permissions, published on 18 July 2025 alongside the Rulebook consultation. Under that draft, new collateral means collateral with risks not identical to those already approved, and accepting it is a model change that the CCP notifies in advance. Accepting a new form of collateral with novel risk is treated as material, and a material change needs the Bank’s permission. The application carries collateral details such as issuer, maturity range, currency, settlement venue and total issuance, together with the planned haircuts and limits.

Under the draft process, the Bank has 10 working days from receipt of a complete Model Change Notification Form to determine materiality. For a standalone material model change, the permission assessment period is generally 60 working days from the later of a complete application or the materiality decision. Requests for additional information can pause and extend that period; where the change forms part of a variation of the CCP’s recognition order, a separate 80-working-day assessment period applies. The statement of policy is itself a draft, to be finalised once the relevant legislation is in place.

Whether a particular tokenised arrangement crosses the materiality line is the open question for each CCP. The draft SS itself lists tokeniser, platform, wallet and key-management risks that a conventional holding of the same bond does not carry, so I would plan on the assumption that the Bank treats most tokenised arrangements as a material change and expect to be told otherwise.

Five areas a CCP should be ready to evidence

The draft SS groups its expectations into five areas: liquidity, valuation and interoperability; settlement finality and legal certainty; credit and concentration risk; operational resilience; and custody and safeguarding. Each turns on the same question from the press release, whether the CCP can value, transfer and realise the asset when a member defaults in stressed markets.

Liquidity, valuation and interoperability

A CCP should be able to show it can transfer and realise the collateral in both normal and stressed conditions (SS paragraph 3.3) and should assess whether the token’s features could materially affect liquidity, valuation or realisability, including whether the tokenised and non-tokenised forms are readily convertible (paragraph 3.4). The sharpest expectation is in paragraph 3.6: a CCP should not assume that tokenised collateral exhibits the same liquidity characteristics as its non-tokenised equivalent, with trading hours and correlated demand both relevant. Where no conventional equivalent exists, the CCP should use an appropriately conservative methodology and review market depth over time (paragraph 3.7). The draft sets no haircut numbers.

Settlement finality and legal certainty

Solely to assist interpretation (SS paragraphs 2.1 and 2.2), the draft describes settlement finality as the point at which a transfer becomes irrevocable and unconditional, and notes that for designated systems this protection comes from the Settlement Finality Regulations. A CCP should understand the point at which transfers become final and whether ownership is sufficiently certain under stress (SS paragraph 3.14). Paragraph 3.15 holds the most practical test in the whole statement: where both a ledger and a central securities depository record ownership, the CCP should know which record determines ownership. Paragraph 3.16 then asks whether whitelisting or governance features could delay liquidation, measured against the requirement that collateral be freely transferable and free from legal restrictions that could impair liquidation.

Credit and concentration risk

The CCP should not assume that the tokenised collateral carries the same credit risk profile as a direct holding of the underlying asset (SS paragraphs 3.9 to 3.10). For a token representing a government bond issued by another entity, the question is whether the CCP’s claim really is on the sovereign alone, or also on the tokeniser, the platform provider, the custodian or the wallet provider (paragraphs 3.11 to 3.12). On concentration, paragraph 3.13 expects assessments to capture exposures to the same underlying issuer, guarantor or asset whatever form the collateral takes, with tokenised-specific risks assessed separately. A limit framework keyed only on security identifiers, with the conventional and tokenised versions of one bond counted as two unrelated positions, would understate exactly the exposure that paragraph asks the CCP to aggregate.

Operational resilience

The Bank expects a CCP to understand the end-to-end operational arrangements behind the tokenised collateral, including changes to ledgers, protocols, smart contracts or permissioning made by third parties (SS paragraph 3.17). Paragraph 3.18 cites rules 2.1.1 and 2.1.7 of the Operational Resilience Part of the CCP Rulebook (a proposed Part, not yet in force), under which a CCP would remain fully responsible for its obligations where functions are outsourced, and where a bridge between systems is relied on, the CCP should check whether alternative arrangements would still let it access, transfer and realise the collateral. Paragraph 3.21 adds a further operational point: loss of cryptographic keys, digital credentials, wallets or permissions could block control, so the CCP should show that effective control would be maintained or restored after a disruption.

Custody and safeguarding

Under proposed rules 2.3(1) and 2.3(2) of the Investment Policy Part, financial instruments posted as margin, default fund contributions or other financial resources must, where possible, be deposited with an operator of a securities settlement system. Qualifying highly secure alternative arrangements are provided for where that is not possible. The proposed treatment of cash deposits is addressed separately under rule 2.4, and these proposed provisions are not yet in force (draft SS paragraph 3.23). Where a digital custodian is used, the CCP should assess what its insolvency or loss of authorisation would do to access (paragraph 3.24), and it should consider when segregation, identification or recoverability could be impaired, including through dependence on keys and credentials (paragraph 3.25).

Digital twin or digitally native: the default-management difference

The glossary in Annex 2 separates two models. A digital twin represents rights in an off-chain asset, where the underlying asset typically remains the authoritative record of ownership. A digitally native asset is issued solely on a programmable platform, and the token is the primary and authoritative record.

The difference shows up when the CCP has to sell. Box B of the consultation explains that, depending on the arrangement, a CCP may need to convert tokenised collateral into a conventional version before monetising it, sell the tokenised asset itself, or use the tokenised asset in a repo transaction. For a digital twin, access to value depends on the legal rights and operational access to the underlying asset; a disrupted link could delay liquidation, and in stress the token could trade at a discount to the bond it represents. For a digitally native asset, a separate underlying or backing asset may not exist, so the CCP depends on the tokenised asset’s own legal, operational and market characteristics; there may also be no equivalent conventional market to absorb a sale under stress.

I would expect a default-management playbook written for conventional gilts to need a branch per model. The twin branch documents the conversion route and its timing; the native branch documents who buys the token in a stressed market. Some of the answer sits outside any single CCP. The paper links scale adoption to liquid, diverse tokenised markets, citing industry proposals for a UK digital gilt instrument (DIGIT) (paragraph 2.26), and to wider legal developments on settlement finality and the treatment of tokenised collateral in insolvency (paragraph 2.27).

What clearing members should take from a CCP-facing paper

The proposed expectations apply to UK CCPs and to recognised non-UK CCPs that the Bank has determined to be, or that are likely to become, systemically important to UK financial stability (paragraph 1.26). Firms clearing, or intending to clear, as clearing members or clients of UK CCPs appear only in the list of other interested stakeholders (paragraph 1.27). The draft SS places no requirement on them.

They still have a stake in the risk analysis. The press release says tokenisation could help firms respond more effectively to margin calls. The consultation’s risk chapter sets out the other side of the same speed: faster transfers could remove the time buffers that currently allow intervention in stress, firms might hold less collateral “just in case”, and automated actions could become synchronised if many participants rely on the same smart contracts, an effect that extended or near-24×7 operation may amplify (paragraphs 2.21 to 2.23). Draft SS paragraph 3.21 says CCPs may also wish to consider whether extended or near-continuous operation could change collateral positions at times when relevant market participants cannot monitor, manage or respond. The broader expectation is that a CCP should demonstrate how operational considerations have been assessed and how effective control of tokenised collateral would be maintained or restored following disruption.

For a member’s treasury or collateral desk, the benefit in the press release is a possibility stated with “could”, and the liquidity risk in the consultation is stated with the same modality. Questions 1 and 2 ask market participants directly about use cases, frictions, timeframes and how tokenisation would change their collateral and liquidity management. Those are the questions where a clearing member can contribute its own operating data.

UK EMIR reporting: nothing in the paper touches Article 9

The consultation contains no reference to trade reporting, trade repositories, Article 9 or margin reporting. Under Article 9(1) of UK EMIR, counterparties and CCPs ensure that the details of any derivative contract they have concluded are reported to a registered or recognised trade repository no later than the working day following conclusion, modification or termination. The details, format and frequency of those reports sit in technical standards: the Bank of England makes them for CCPs, and the FCA makes them in all other cases. Our EMIR reporting guide covers the reportable fields, and the division of supervisory work between the two authorities is set out in our note on the BoE-FCA FMI supervision MoU and UK EMIR reporting.

My reading is that this consultation generates no change request for a UK EMIR reporting team. If a CCP later accepts a tokenised form of a bond, the way margin reports describe that collateral falls under the existing standards and any guidance the FCA or the Bank issues at that point. The paper offers none, and a firm inventing its own internal classification for tokenised collateral in its margin feed now would be anticipating guidance that does not yet exist.

Stablecoins, tokenised MMF units and tokenised gold stay at question stage

The consultation asks whether its expectations would remain appropriate for a broader range of tokenised collateral, and it is explicit that this involves no change to eligible collateral (paragraphs 1.24 and 3.4). Consultation paragraph 3.6 records industry interest in three asset types and sets out the Bank’s considerations for each.

• The Bank says stablecoins may not currently be accepted by CCPs as highly liquid collateral. Accepting them would require a change to the CCP Rulebook or for a firm to obtain the Bank’s permission, plus other approvals, and the CCP would remain responsible for judging whether they fit its risk appetite, even where a regulated stablecoin regime mitigates some risks.
• For tokenised money market fund units, the CCP must be able to realise value when needed, including checking for redemption barriers, and the Bank flags that increases in margin could contribute to rapid redemption from MMFs or tokenised MMFs.
• Under the current framework, gold qualifies where its conditions are met, including that it is allocated pure gold bullion of recognised good delivery. If tokenisation breaks the link to the underlying bullion, the asset may fail those criteria and might instead be assessed as a financial instrument.

Question 5 asks for benefits, risks and practical considerations on all three as potential future forms of CCP collateral. Firms following the issuer side of stablecoins will find the Bank’s separate regime summarised in our article on BoE systemic stablecoin rules for UK issuers; the Bank also points to the FCA’s separate Call for Input on tokenised gold.

UK and EU timing side by side

ESMA published its own Call for Evidence on CCP collateral tokenisation (ESMA91-1505572268-4934) on 9 October 2026, with comments due by 15 January 2027. The two exercises share a starting point. ESMA’s official announcement frames the exercise around how tokenisation affects the use of already eligible collateral and identifies digital twins, natively issued assets and hybrid arrangements. The Call for Evidence gathers information rather than introducing new binding collateral rules. They differ in stage: the Bank has published draft supervisory expectations, while ESMA is gathering evidence and will assess feedback in the first quarter of 2027 before deciding whether any regulatory or supervisory convergence action is needed.

For a group clearing through both UK and EU CCPs, the EU deadline lands first, four weeks before the Bank’s. ESMA is also working on Commission Delegated Regulation (EU) No 153/2013 in a separate track, consulting in February 2026 on draft RTS covering guarantees as collateral and parts of CCP investment policy and publishing its final report with the final draft RTS on 19 October 2026 for submission to the European Commission; we covered the consultation in guarantees as CCP collateral under ESMA’s draft RTS. In the UK, technical standards on CCP collateral under Article 46(3) of UK EMIR are made by the Bank of England, so ESMA’s draft RTS concern the EU text only.

Responding by 12 February 2027

Responses go by email to Tokenised_Collateral_At_CCPS_CP@bankofengland.co.uk. The Bank asks respondents to state whether they consent to publication of their name or organisation and whether any proposal is likely to affect people who share protected characteristics under the Equality Act 2010. Responses may be shared with HM Treasury and the FCA, which may contact respondents for clarification.

Questions 1 and 2 invite views on relevant use cases and the potential effects of tokenisation on collateral and liquidity management. Clearing members can contribute evidence from their own margin and collateral operations. Question 3 is where a CCP that has already scoped an application can point to the paragraphs it found hard to evidence.

Frequently Asked Questions

Can a CCP start accepting a tokenised form on a provisional basis while its application is pending?

The consultation does not discuss provisional acceptance. Under UK EMIR Article 49 as it currently reads, a CCP may not adopt a significant change to its models and parameters before the Bank validates it, though the Bank may allow provisional adoption before validation where duly justified. Whether a given tokenised arrangement counts as a significant change is a question for the CCP’s own assessment and its supervisory dialogue.

Does the paper cover tokenised deposits or on-chain cash used to settle variation margin?

Tokenised deposits are not addressed by name, and stablecoins appear only as a potential future collateral type. On the cash leg, the paper notes that the absence of on-chain cash settlement may leave some frictions in place, and points to the Bank’s work on a synchronisation capability for the renewed RTGS service (RT2). Its Synchronisation Lab launched in October 2025, and delivery of the capability is targeted for 2028 (paragraph 2.29).

Could a CCP accept tokenised securities recorded at a Digital Securities Depository before wider legal reform?

Possibly, as an interim route. Paragraph 2.28 says the current framework, including the rules on holding collateral in the Investment Policy Part of the CCP Rulebook (a proposed Part, not yet in force), may limit how some tokenised arrangements fit, while the Bank works with the FCA and HM Treasury on a regime for digital securities issuance and settlement. Pending those reforms, the Bank’s existing permissions powers could enable acceptance of tokenised securities recorded at a Digital Securities Depository instead of a CSD, or held with a regulated custodian. Separately, once the new section 138BA permissions power under the Financial Services and Markets Act 2000 is in force, CCPs will be able to seek the Bank’s permission to modify the CCP Rulebook where the relevant criteria are met (paragraph 1.23).

Does the consultation change the capital treatment of tokenised assets a clearing member bank holds?

No. The paper addresses CCPs only. Prudential treatment for banks is covered by the PRA’s Dear CEO letter of 18 May 2026 on tokenised assets, stablecoins and other cryptoasset exposures, which states the PRA’s view that tokenised traditional assets would in general receive the same prudential treatment as their non-tokenised equivalents, subject to conditions on the legal rights conferred and the underlying risks.

Does the paper say anything about tokenised collateral in the Bank’s own market operations?

The consultation is limited to CCPs. The joint Bank and FCA release of 18 May 2026 described a separate commitment by the Bank to work on enabling tokenised equivalents of already eligible assets to be used as collateral, covering both CCPs and the Bank’s own operations, so changes to the Bank’s own collateral framework would come through that workstream.

Related Articles

• CCP Collateral Tokenisation: ESMA’s Call for Evidence Due 15 January 2027: the EU call for evidence on tokenised collateral at EU CCPs, question by question.
• EMIR Reporting Explained: who reports derivatives to trade repositories, which fields apply and how the reporting cycle runs.
• BoE-FCA FMI Supervision MoU: What the 2025/26 Review Means for UK EMIR Reporting: how the Bank and the FCA divide supervision of UK market infrastructure and reporting.
• BoE Systemic Stablecoin Rules: What UK Issuers and E-Money Firms Must Prepare For: the Bank’s regime for systemic stablecoin issuers.
• PRA Cryptoasset Exposures: The 100% Capital Expectation for UK Banks: the PRA’s prudential expectations for bank exposures to cryptoassets and tokenised assets.
• Guarantees as CCP Collateral: What ESMA’s Draft RTS Changes: ESMA’s proposed amendments to the EU CCP collateral and investment policy RTS.

Key Takeaways

• Diary two response dates: 15 January 2027 for ESMA’s EU call for evidence and 12 February 2027 for the Bank, with publication consent and the Equality Act statement included in the Bank response.
• A CCP scoping a tokenised government bond should plan for notification and a materiality assessment under the draft process, with a permission application where the Bank determines the change is material. Prepare the collateral details, planned haircuts and limits that such an application carries, and use the Bank’s invitation to engage before filing.
• Decide whether collateral concentration monitoring aggregates by underlying issuer across conventional and tokenised forms; a limit set per security identifier that counts the two forms as unrelated positions will not show the combined exposure.
• Record the consultation as introducing no immediate UK EMIR reporting build change. Reassess if the applicable reporting standards or supervisory guidance change, or if a CCP’s acceptance of tokenised collateral affects information reported under the existing requirements.
• Cite UK EMIR Articles 46 and 49 as the operative text in internal policies until the CCP Rulebook commences; check the 2026 Q4 policy response for the final Part names and rule numbers.
• Stablecoins may not currently be accepted as highly liquid CCP collateral, and accepting them would require a change to the CCP Rulebook or a Bank permission to waive or modify the relevant rule. Tokenised MMF units require assessment against the applicable collateral categories and eligibility conditions. Tokenised gold may qualify where the requirements for allocated pure gold bullion remain satisfied, or may need to be assessed as a financial instrument. The consultation itself does not amend collateral eligibility.

Sources and References

• Bank of England, news release, “Bank of England sets out approach to tokenised collateral in central clearing” (29 October 2026): bankofengland.co.uk
• Bank of England, consultation paper, “Consultation on supervisory expectations for central counterparties seeking to accept tokenised collateral”, including the draft Supervisory Statement (Annex 1) and glossary (Annex 2) (29 October 2026): bankofengland.co.uk
• Bank of England, consultation paper, “Ensuring the resilience of CCPs” (18 July 2025): bankofengland.co.uk
• Bank of England, draft statement of policy, “The Bank of England’s approach to supervisory processes (model changes, recognition orders and variations of recognition orders) and margin permissions” (18 July 2025): bankofengland.co.uk
• Regulation (EU) No 648/2012 as it forms part of UK law (UK EMIR), Article 9: legislation.gov.uk
• UK EMIR, Article 46 (Collateral requirements): legislation.gov.uk
• UK EMIR, Article 49 (Review of models, stress testing and back testing): legislation.gov.uk
• The Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (SI 1999/2979): legislation.gov.uk
• FCA and Bank of England, news release, “FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets” (18 May 2026): bankofengland.co.uk
• FCA, Feedback Statement FS26/1, “Tokenisation in wholesale markets” (14 September 2026): fca.org.uk
• PRA, Dear CEO letter, “Prudential treatment of tokenised assets, stablecoins, and other cryptoasset exposures” (18 May 2026): bankofengland.co.uk (PDF)
• ESMA, Call for Evidence, “CCP collateral tokenisation”, ESMA91-1505572268-4934 (9 October 2026): esma.europa.eu (PDF)
• ESMA, press release, “ESMA seeks evidence on the use of tokenised collateral in central clearing” (9 October 2026): esma.europa.eu (PDF)
• ESMA, Consultation Paper on draft RTS amending Commission Delegated Regulation (EU) No 153/2013 (guarantees as CCP collateral and investment policy), ESMA91-1505572268-4513 (23 February 2026): esma.europa.eu (PDF)
• ESMA, Final Report on draft RTS amending Commission Delegated Regulation (EU) No 153/2013 (guarantees as CCP collateral and investment policy), ESMA91-1505572268-4904 (19 October 2026): esma.europa.eu (PDF)

Building the tokenised collateral evidence file before 12 February 2027

The draft SS reads as a list of questions the Bank will ask during an application, and the paper invites CCPs to start that conversation early. A CCP’s working file maps each of the five areas to its own arrangement, names the record that determines ownership, and documents how the CCP would convert or sell the asset in a member default. A clearing member’s file is shorter: its answers to Questions 1 and 2, with its own data on margin-call timing and collateral buffers, sent to Tokenised_Collateral_At_CCPS_CP@bankofengland.co.uk by 12 February 2027.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.