The Bank of England has launched a formal consultation on extending the operating hours of its core payments infrastructure toward near 24/7 settlement, marking a significant step in the modernization of the United Kingdom’s financial plumbing. The proposals cover both the Real-Time Gross Settlement system and CHAPS, the UK’s high-value payment network, and arrive alongside a coordinated tokenization framework published jointly with the Financial Conduct Authority.

What the Consultation Proposes

The BoE’s consultation paper, published on May 18, sets out a phased approach to extending settlement hours. The first phase would add an additional settlement cycle to cover parts of the overnight window and weekends, while the longer-term goal envisions near-continuous availability for RTGS and CHAPS. Both systems currently operate within standard UK business hours, leaving capital locked and exposures accumulating during off-hours, weekends, and public holidays.

RTGS is the system through which UK banks hold and exchange reserves at the Bank of England, settling obligations in central bank money on a gross, real-time basis. CHAPS runs on top of it and handles high-value transactions including mortgage completions, corporate payments, and the settlement of financial market trades. Both systems have operated without systemic failure for decades, but their temporal constraints have become increasingly problematic as global markets have internationalized and digital asset markets have demonstrated what continuously available settlement looks like.

Joint Tokenization Vision With the FCA

Alongside the settlement consultation, the Bank of England and the FCA published a joint statement setting out shared principles for digital wholesale markets. The Prudential Regulation Authority also issued updated guidance on the treatment of tokenized asset exposures and on innovations in deposits, e-money, and stablecoins. Taken together, the announcements represent a coordinated signal that UK financial regulators have shifted from treating blockchain-native finance as a peripheral concern to treating it as a reference point for market redesign.

The tokenization framework addresses how regulated institutions might issue, trade, and settle tokenized versions of traditional financial instruments within the existing regulatory perimeter. Industry participants have noted that the BoE’s willingness to explicitly reference digital asset settlement as a benchmark for its own infrastructure modernization represents a meaningful departure from previous regulatory postures.

Implications for Global Settlement Infrastructure

The UK is not acting in isolation. The European Central Bank has been running its own digital settlement experiments, and the Bank for International Settlements has published extensive research on tokenized wholesale markets. However, the BoE’s approach is notable for its directness in linking traditional payment system reform to the capabilities demonstrated by blockchain-based settlement. The consultation acknowledges that when RTGS and CHAPS go offline, institutions are forced to hold precautionary liquidity buffers to cover settlement gaps, a cost that continuously available systems could reduce.

Market participants have pointed out that extending settlement hours could reduce counterparty risk, lower collateral requirements, and improve capital efficiency across the UK financial system. The consultation period is expected to run through the third quarter of 2026, with implementation timelines to be determined based on industry feedback and technical readiness assessments.

Risks and Uncertainties

Critics have cautioned that extending settlement hours introduces operational complexity, including the need for 24/7 staffing, monitoring, and incident response capabilities that many financial institutions may not currently possess. The cost of maintaining round-the-clock operations could disproportionately affect smaller banks and payment service providers. There are also questions about whether the tokenization framework will be broad enough to accommodate the full range of digital asset innovations or narrow enough to create meaningful regulatory clarity.

Additionally, the consultation is at an early stage, and the gap between a consultation paper and operational implementation in critical financial infrastructure is typically measured in years rather than months. Whether the BoE’s timeline aligns with the pace of innovation in digital asset markets remains an open question.

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