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Basis Desk
Regulation & Policy · 1 min read

UK FCA Chief Outlines Tokenization Push and Upcoming Safeguarding Rules

Nikhil Rathi announced an upcoming roadmap with the Bank of England and planned consultations on asset custody as market participants demand an exit from sandbox pilots.

Neutral

Key points

  • The FCA and Bank of England will publish a joint roadmap transitioning wholesale tokenization from testing sandboxes to permanent market infrastructure 1.
  • The regulator plans to consult on specific safeguarding rules to clarify asset ownership for tokenized investment products 1.
  • Industry feedback across 120 submissions cited "pilot fatigue" and urged faster integration of on-chain post-trade settlement 1.

The UK Financial Conduct Authority (FCA) is preparing to transition domestic financial markets from experimental sandboxes into full production for distributed ledger infrastructure, according to a speech delivered by FCA Chief Executive Nikhil Rathi on Sept. 22 1.

Speaking at a TheCityUK dinner, Rathi noted that market participants have expressed "pilot fatigue," demanding commercial-scale permanence rather than temporary trials 1. The regulator, alongside the Bank of England, received more than 120 industry responses concerning wholesale tokenization 1. The feedback identified post-trade collateral velocity as a primary opportunity, while flagging persistent hurdles in cross-border law, insolvency, and settlement interoperability 1.

Safeguarding and Joint Central Bank Roadmap

To address structural shifts in continuous and on-chain trading, the FCA plans to publish a joint tokenization roadmap with the Bank of England to bridge testing sandboxes and permanent market infrastructure 1. The authority also intends to open a consultation on safeguarding rules tailored to tokenized investment assets to ensure clear ownership frameworks 1.

Regulators are responding to a shifting landscape where decentralized finance platforms operate parallel to regulated venues 1. Rathi highlighted recent milestones, including the authorization of the UK's first native tokenized fund in June, a fund tokenization policy statement in April, and the approval of HSBC Orion as the first live Digital Securities Depository entrant 1. The regulator is also deploying agentic AI to parse through one billion rows of daily market data across 9,000 supervised entities to monitor continuous markets and prevent abuse 1.

The policy adjustments arrive as global venues integrate distributed ledgers, with the European Central Bank introducing wholesale digital payment initiatives 1. At the time of writing, broad digital asset markets trade near a $2.85 trillion total market capitalization.

Questions this story raises

What is the FCA's upcoming tokenization roadmap?
The upcoming joint roadmap between the FCA and the Bank of England will outline clear pathways to move market infrastructure from temporary test environments into full commercial production.
Why is the FCA consulting on asset safeguarding?
The FCA is preparing a consultation on safeguarding rules to remove ambiguity surrounding legal ownership and custody when investment assets are tokenized on distributed ledgers.

Sources

  1. [1] Building the next generation of market infrastructure — UK FCA News, September 27, 2026

Written by Basis Desk's newsroom system from the primary sources above and machine-verified against them before publication. Market figures marked "at the time of writing" come from live exchange data. Report an error: hello@basisdesk.news.

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