UK regulators push for near 24-hour payments to support tokenization

The Bank of England (BoE) and the Financial Conduct Authority (FCA) are advancing plans to extend the operating hours of key payment and settlement systems to nearly 24 hours a day, a move designed to accommodate the growing tokenization of financial markets. The proposals, announced in recent regulatory documents, signal the UK’s intent to modernize its financial infrastructure for a digital asset era.

Extended hours for RTGS and CHAPS

The BoE has proposed adding weekend and extended operating hours to its Real-Time Gross Settlement (RTGS) system and the CHAPS high-value payment system. Currently, these systems operate during standard business hours on weekdays, limiting the ability to settle tokenized transactions and cross-border payments in real time around the clock. The bank stated that the change is necessary to support new tokenization-based payment and settlement models that require continuous availability.

Regulatory framework for tokenized assets

In parallel, the UK’s Prudential Regulation Authority (PRA) has issued guidelines proposing that tokenized financial products should be subject to the same regulatory standards as traditional instruments, provided they carry equivalent legal rights and risk profiles. This approach aims to create a level playing field while encouraging innovation in wholesale markets. Katie Harries, head of Europe policy at Coinbase, noted that the UK is presenting a clear vision for tokenization, which could expand access to new capital and investment opportunities.

Broader crypto regulation timeline

The FCA is also developing a comprehensive cryptocurrency regulatory framework that will cover stablecoin issuance, trading, custody, and staking. The regulator has set a target for full implementation before 2027. These efforts align with the government’s broader ambition to position the UK as a global hub for digital asset innovation while maintaining financial stability and consumer protection.

Conclusion

The push for near 24-hour payment systems and clear tokenization rules represents a significant step in the UK’s financial modernization agenda. By aligning payment infrastructure with the needs of digital markets, regulators aim to foster innovation, improve cross-border payment efficiency, and attract investment in tokenized finance. The coming years will be critical as the FCA finalizes its crypto rules and the BoE implements extended settlement hours.

FAQs

Q1: What is tokenization in financial markets?
Tokenization refers to the process of representing real-world assets, such as bonds, equities, or commodities, as digital tokens on a blockchain or distributed ledger. This can enable faster, cheaper, and more transparent trading and settlement.

Q2: Why do payment systems need to operate 24 hours for tokenization?
Tokenized markets often require real-time settlement across different time zones and outside traditional banking hours. Extended payment system hours allow for continuous trading, clearing, and settlement without delays.

Q3: When will the UK’s new crypto regulations take effect?
The FCA aims to implement a comprehensive regulatory framework covering stablecoins, trading, custody, and staking before 2027. The BoE’s extended payment hours are also expected to be phased in over the next few years.