UK payments blueprint backs tokenized payments in retail finance overhaul

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UK payments blueprint backs tokenization

Highlights

HM Treasury's updated National Payments Vision incorporates tokenization and digital money as core infrastructure for the UK's retail payments ecosystem.
The Financial Conduct Authority will require crypto firms to obtain licenses from September 2024 to February 28, 2027, before the new regime starts on October 25, 2027.
The Bank of England considers near-24/7 core settlement infrastructure to facilitate cross-border and tokenized finance, with public feedback open until July 3, 2024.

Roadmap ties payments reform to digital money

As reported by Cointelegraph, citing HM Treasury, an update to the government's retail payments modernization roadmap says tokenization and new forms of digital money should form part of the core infrastructure for the UK's future payment ecosystem.

The Payments Vision Delivery Committee says programmable payments, including those relying on tokenization, could support product-level innovation. The updated National Payments Vision also calls for infrastructure that allows emerging digital money models to interact with traditional payment rails.

That direction follows earlier UK policy steps. In April, the government says it will revisit the payments rulebook to support technologies including stablecoins and tokenization, with consultation planned on reforms to payment services and electronic money rules to create a single framework for traditional and tokenized payments, including stablecoins and tokenized deposits.

Regulatory shift broadens impact across finance

The payments overhaul is taking shape alongside a wider UK regulatory buildout for digital assets. The Financial Conduct Authority says the licensing window for crypto companies opens from September until Feb. 28, 2027, ahead of the regime going live on Oct. 25, 2027, with trading platforms, custodians, stablecoin issuers, staking companies and other intermediaries required to obtain authorization to operate in the UK.

The Bank of England also proposes extending operating hours for its core settlement infrastructure toward near-24/7 availability as tokenized finance develops. The central bank says longer hours would support cross-border payments and new settlement models, and it is seeking public feedback until July 3 before publishing a response in the summer.

For the broader financial sector, the combined measures signal that tokenization is moving from policy discussion toward infrastructure planning. The FCA says tokenization and distributed ledger technology could improve fund management efficiency and support innovation across the UK asset management industry.

Our earlier report on Brookfield Asset Management’s plan to expand AI-focused data centers in London’s Canary Wharf highlighted how surging demand for computing power and electricity is reshaping U.K. investment priorities. It also noted Brookfield’s view that long-term, contract-backed facilities can still offer attractive opportunities despite concerns about market oversupply as energy use and digitalization accelerate across Europe.

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