The Financial Conduct Authority (FCA) has signalled a decisive shift in ambition for the FCA tokenisation roadmap, calling for the UK to move beyond test environments and create the infrastructure for tokenised assets to operate at scale across wholesale markets. Speaking at a City of London dinner on 22 September, FCA chief executive Nikhil Rathi said the era of pilots and sandboxes had run its course, with firms now seeking what he described as “full production and permanence.”
For investors and portfolio managers watching from the sidelines, the question is not whether tokenisation will arrive in wholesale markets, but at what pace, on what legal foundations, and with what regulatory safeguards in place.
What the FCA tokenisation roadmap actually proposes
Rathi confirmed that the FCA and the Bank of England would publish a joint tokenisation roadmap, setting out a path from current testing environments to established market infrastructure. The comments came in the wake of a joint call for input on the future of tokenisation in UK wholesale markets, which attracted more than 120 responses from across the sector. Industry participants highlighted opportunities in post-trade processes, particularly the more efficient movement of collateral, as one of the most tangible near-term use cases.
Rathi was equally candid about the obstacles. Respondents identified concerns around settlement finality, prudential treatment, and interoperability, as well as more complex questions involving insolvency and cross-border conflicts of law. These are not trivial procedural hurdles: they touch the structural integrity of market infrastructure and the legal certainty that underpins institutional confidence.
According to Lexology, the deadline for responses to the Call for Input is 3 July 2026, with a feedback statement expected later in the summer. That timetable gives wholesale market participants and their legal and compliance teams a defined window in which to shape the final framework, before positions harden into formal guidance.
Collateral, fragmentation and the structural risks ahead
One of the more concrete forward steps comes from the Bank of England. PwC UK reports that the Bank of England will consult on a supervisory statement and a discussion paper, later in 2026, on the acceptance of tokenised collateral by Central Counterparties. For institutional investors who rely on efficient collateral management to optimise returns and manage liquidity across portfolios, that consultation will deserve close attention.
The FCA has already moved on some fronts. A policy statement on fund tokenisation was published in April, and the regulator authorised the UK’s first fully native tokenised fund in June. Rathi also said the FCA intends to consult on safeguarding rules for relevant tokenised investment assets, following industry feedback, though that consultation has not yet been launched.
The systemic concern Rathi raised is worth pausing on. He warned that the development of tokenisation and decentralised finance could produce parallel market structures running alongside traditional markets. That bifurcation raises questions about liquidity, price discovery, market fragmentation and regulatory oversight, particularly as markets move towards continuous or potentially 24/7 trading. For those managing drawdown risk in retirement portfolios, markets that never close are not inherently safer: they create new forms of sequence-of-returns vulnerability if price dislocations occur outside conventional trading windows.
Rathi described interoperability as critical as traditional exchanges, on-chain platforms and decentralised systems develop alongside each other. The FCA, he added, is prepared to consider how its regulatory framework could be adapted to remain “digitally fit,” while maintaining consistent expectations around market integrity, resilience and investor protection.
For investors with longer time horizons, the message from the regulator is that the direction of travel is fixed but the legal and operational foundations are still being poured. The Bank of England’s collateral consultation later in 2026 will be an early test of whether the architecture being built can bear institutional weight.
