BoE's Sasha Mills: live settlement link for tokenised platforms in 2028, five commitments to industry
Serguey Asael Shinder2 min readSasha Mills of the Bank of England set out how the Bank intends to handle tokenised markets in a speech at a digital assets summit hosted by Hogan Lovells and Global Digital Finance on 1 October. It is a speech by one official describing the Bank's approach, not a new rule.
Settlement in central bank money. Mills said the cash leg of a digital asset trade is not a secondary detail and that central bank money remains the ultimate risk-free settlement asset and the anchor for the singleness of money. The Bank intends to deliver a live synchronisation capability in 2028 that lets new platforms settle transactions in central bank money. It is being tested now in the Synchronisation Lab, building on Project Meridian, where prospective operators can develop use cases in a non-live environment.
The sandbox in numbers. The Digital Securities Sandbox, run with the Financial Conduct Authority, lets firms issue, trade and settle digital securities on new technology and combine trading and settlement in one legal entity, which was not previously allowed. Its limits are £8 billion to £13.1 billion for gilts and £17 billion to £28 billion for sterling corporate bonds. The Bank has broadened the settlement assets firms may use to include stablecoins, subject to minimum requirements and case-by-case assessment. Mills pointed to DIGIT, a digitally native government bond issued in the sandbox, as a practical catalyst for the surrounding ecosystem. A tokenisation roadmap with the FCA is due later this year, following a call for input in May.
Rules ahead. She said the future of central securities depository regulation and settlement finality belongs on the innovation agenda, including whether the definition of a CSD fits new business models. The guiding principle remains same risk, same regulatory outcome: rules may be applied differently to a different technology, but the standard does not drop. The Government has proposed extending the Bank's secondary innovation objective to its regulation of payment systems, including those using digital settlement assets, which the Bank welcomes.
Five commitments, five challenges. The Bank will stay technology-neutral while holding firms to equivalent outcomes; support experimentation and scaling with proportionate limits; improve its processes and response times; support the Wholesale Digital Markets Champion and the Government's digital strategy; and work with other authorities to reduce cross-border fragmentation. In return, Mills asked firms to move beyond proofs of concept, commit capital, engage early, invest together on standards and avoid closed solutions.
What it means
The 2028 date is the concrete piece. Until a tokenised platform can settle against central bank money, its cash leg runs on commercial bank money or stablecoins, with the risks that brings. A dated live service tells firms building in the sandbox when that constraint can lift, and the stablecoin settlement allowance shows how the Bank is bridging the gap until then.