The UK's wholesale tokenization landscape advanced on September 14 when the Financial Conduct Authority (FCA) and Bank of England published Feedback Statement FS26/1, summarizing 123 responses to their May consultation on tokenizing wholesale markets.
Industry respondents, including Hedera, BlackRock, Ripple, and Chainlink, delivered a consistent message: temporary regulatory regimes discourage investment. Firms urged the regulators to move beyond sandboxes and pilots toward full production environments.
Regulatory Roadmap and Collateral Focus
The FCA and Bank of England plan to publish a joint UK wholesale tokenization roadmap later in 2026, featuring target dates for each workstream. The regulators confirmed that the Digital Securities Sandbox already permits scalable live activity, with a clear pathway to permanent authorization to follow.
Collateral mobility emerged as the dominant theme in respondent feedback. The regulators cited a US report finding that market participants hold an average of 7% excess collateral as a buffer. Tokenization could significantly reduce these holdings.
HM Treasury intends to prepare for further Digital Gilt Instrument (DIGIT) issuances if the first, scheduled to run on HSBC Orion in Q1 2027, succeeds. The Bank of England is also developing a synchronization service for tokenized assets to settle in central bank money, targeting completion in 2028.
Hedera's Position in UK Finance
Hedera submitted three priorities to the consultation: interoperability, governance, and auditability. The network is not new to UK regulated finance—FCA-regulated exchange Archax has issued tokenized money market funds on Hedera's Token Service, covering products from Aberdeen, State Street, Fidelity, and LGIM.
In July 2025, Archax, Lloyds Banking Group, and Aberdeen completed what they described as a UK-first FX collateral transaction using tokenized money market fund units and tokenized gilts on Hedera, establishing a live collateral track record within regulated custody and settlement workflows.
Broader Industry Developments
Hedera competes in a crowded field; Canton and private bank chains dominate many wholesale bank pilots. LSEG's partnership to tokenize UK stocks demonstrates the pace of the equity-tokenization race.
The FCA's crypto authorization gateway opens on 30 September 2026, with the full cryptoasset regime following in October 2027. On the same day FS26/1 was published, the FCA opened a separate consultation on tokenized gold, with responses due 23 October 2026.
