BoE Deputy: Tokenization Could Cut Costs, Boost Competition

Bank of England Deputy Governor Sarah Breeden said tokenization could lower costs and boost competition in payments and markets, as the central bank reviews stablecoin limits and proposes near-24/7 settlement hours.

Breeden, speaking at a conference, highlighted that tokenization — the process of representing assets as digital tokens on a blockchain — has the potential to improve efficiency and reduce costs in payment systems and financial markets. The Bank of England is currently reviewing its regulatory framework for stablecoins, which are digital tokens pegged to traditional currencies, and is considering extending settlement hours to nearly 24/7 to support tokenized markets. These moves aim to foster innovation while ensuring digital money remains trusted and interoperable with existing infrastructure.

For cryptocurrency and digital asset traders, the BoE's stance is significant because it signals growing institutional acceptance of blockchain-based financial instruments. Tokenization could bridge the gap between traditional finance and decentralized finance (DeFi), potentially increasing liquidity and creating new trading opportunities. Stablecoin regulation is particularly relevant, as stablecoins are widely used in crypto trading for hedging and as a medium of exchange. The proposed near-24/7 settlement hours align with the crypto market's round-the-clock nature, which could reduce friction for institutional participants. For current pricing context on major digital assets, traders can check NowPrice's crypto page.

Looking ahead, market participants will watch for the BoE's final proposals on stablecoin regulation and the timeline for implementing extended settlement hours. The outcome could influence how other central banks approach tokenization and digital money. Additionally, any changes to stablecoin rules may affect the supply and demand dynamics of major stablecoins like USDT and USDC, which are integral to crypto market liquidity.