The Bank of England will publish policy in 2026 clarifying how tokenized collateral can operate under the UK’s European Market Infrastructure Regulation (EMIR) framework for derivatives markets, according to Sasha Mills, executive director for financial market infrastructure. She also elaborated on stablecoin usage within the Digital Securities Sandbox.
The central bank aims to enable tokenized versions of assets already acceptable as regulatory collateral by central counterparties to qualify under UK EMIR rules, provided risks are appropriately mitigated. The Bank has also been gathering industry feedback on whether to broaden eligibility to include a wider range of permitted assets.
The announcement follows the European Central Bank’s statement this week that it would begin accepting tokenized collateral for central bank operations. Mills highlighted key challenges for tokenized assets including operational resilience and legal enforceability, despite the UK passing digital assets legislation to clarify their legal status as property.
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