Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to update the Financial Collateral Arrangements (No. 2) Regulations 2003 to ensure that tokenised assets receive the same legal treatment as traditional counterparts.

It is important that our legal framework supports digital innovation. As set out in the Wholesale Financial Markets Digital Strategy, the government is committed to providing legal clarity where it is needed.

We are engaging with the sector to understand what barriers to tokenisation exist in law. The regulators are also seeking to provide clarity to support the equivalent treatment of tokenised and non-tokenised assets, both prudentially and as eligible collateral where risks are comparable.