UK plans near-24/7 settlement for tokenised markets

The Bank of England and the Financial Conduct Authority are moving toward expanding the UK’s payment and settlement systems to operate on a near-24/7 basis as part of efforts to support digital finance and tokenised assets.

As part of a consultation, regulators proposed extending the operating hours of the Real-Time Gross Settlement (RTGS) system and the CHAPS payment network to include longer daily availability and weekend operations.

The changes are aimed at supporting the growing use of tokenised securities, stablecoins, and blockchain-based financial products, as regulators seek to modernise the UK’s financial infrastructure to keep pace with the ever-evolving nature of digital asset markets.

What’s the new settlement proposal

The main focus of the UK’s settlement proposal is to enhance RTGS and CHAPS operations in order to modernise its financial infrastructure. By 2027, the Bank of England intends to increase weekday settlement hours to almost 24 hours a day. Eventually, it will transition to a “22×6” model (22 hours a day, six days a week), with full 24/7 coverage being considered in the future.

The reasoning behind the shift is pretty straightforward. Technologies like stablecoins, tokenised deposits, and blockchain-based markets do not clock out at the end of a business day. They run continuously, and that puts real pressure on traditional banking systems that were never built with that kind of demand in mind. By gradually expanding settlement hours rather than making an abrupt change, regulators are trying to bring the underlying infrastructure in line with where digital finance is already heading, while also trimming costs and improving overall efficiency along the way. Before additional policy revisions are anticipated later this year, businesses, financial institutions, and other stakeholders have an opportunity to provide feedback on the plan through public consultation, which is open until July 3.

Why near-24/7 settlement matters

The push for near-24/7 settlement comes down to a pretty fundamental mismatch between how traditional banking was designed and how finance actually works today. The world has changed, but legacy systems were designed for a national setting with set business hours. When the infrastructure that underpins cryptocurrency exchanges, cross-border transfers, and international trading stops for the weekend or waits until Monday AM, delays and needless dangers begin to accumulate.

Settlement risk, which occurs when one side of a transaction clears while the other side has not yet caught up, is one of the more significant issues. Institutions may be susceptible to market volatility and unexpected liquidity shortages at the worst times due to that gap, even if it is only a matter of hours. By keeping payment windows open and synchronised across time zones, moving toward continuous settlement will greatly lessen that vulnerability and improve the predictability and ease of foreign payments. Additionally, it would have a significant impact on products like tokenised deposits and stablecoins, which currently run continuously on blockchain networks but still rely on outdated traditional systems when conversion is required.

PRA’s updated regulatory guidance

The Prudential Regulation Authority (PRA) has revised its guidelines regarding tokenised financial instruments, making it clear that these assets should be regulated similarly to traditional ones if they entail the same risks and rights. The Basel Committee on Banking Supervision, which is examining regulations pertaining to tokenisation, stablecoins, and blockchains, is one of the growing worldwide standards reflected in the update, which replaces prior 2022 proposals.

Financial oversight is divided into two distinct roles under the UK’s “twin peaks” regulatory model: the Bank of England and the Prudential Regulation Authority (PRA) concentrate on systemic stability and prudential standards, while the Financial Conduct Authority (FCA) manages conduct, transparency, and investor protection. Tokenised assets are making it harder to distinguish between securities, payments, and digital infrastructure, which makes this distinction helpful.

Competition between global financial centres

The way nations handle tokenisation and digital banking is being influenced by global competitiveness. Pressure from other financial hubs is reflected in the UK’s most recent initiative, while the U.S., with its large capital markets, faces regulatory fragmentation that hinders progress; Europe advances through frameworks like MiCA, and hubs like Singapore, Hong Kong, Switzerland, and the UAE actively encourage blockchain adoption.

The UK’s larger goals for its financial system revolve around tokenised funding, but the way forward is being carefully considered and implemented gradually rather than all at once. A more extensive near-24/7 settlement framework is anticipated to follow around 2031. Extended CHAPS hours are scheduled to start in 2027. The fact that a full prudential framework from the PRA might not be available until 2028 illustrates how carefully the timeframe has been planned. The overall picture is one of a system that sincerely wants to modernise but recognises that quality is far more important than speed.