TL;DR: The Bank of England is consulting until February 12, 2027, on whether to allow central counterparties to accept tokenized collateral. Meanwhile, the Financial Conduct Authority has settled with HTX, which is leaving the U.K. France’s Senate passed a bill to implement the OECD’s CARF tax-reporting standard.
Key Takeaways:
- The Bank of England opened a consultation on tokenized collateral for central counterparties on October 29, which will remain open until February 12, 2027.
- The FCA’s October 28 settlement ends HTX’s U.K. activity and bars it from targeting U.K. consumers.
- Unlawful digital currency promotions in the U.K. carry up to two years in prison, an unlimited fine, or both.
- The French Senate passed its CARF bill on October 27; it now goes to the National Assembly as Bill no. 3421.
- 77 jurisdictions have committed to CARF, with first exchanges due by 2027 in the U.K. and the EU (except Cyprus), and by 2029 in the U.S.
A busy week for digital asset policy in Europe saw the Bank of England (BoE) open a consultation on allowing central counterparties to accept tokenized collateral, a move that could make it quicker and easier for banks to post collateral against their trades. The country’s financial watchdog reached a settlement with crypto exchange HTX, under which the latter will leave the U.K. market after a year-long legal fight over unlawful financial promotions.
Meanwhile, across the channel, the French Senate has passed a bill to implement the OECD’s Crypto-Asset Reporting Framework (CARF), bringing France closer to automatically sharing digital asset transaction data with foreign tax authorities, with the country committed to first exchanges by 2027.
Bank of England launches consultation on tokenized collateral
The United Kingdom’s central bank is exploring how banks could use tokenized versions of financial assets, such as government bonds, as security when trading with one another.
In an October 29 announcement, the BoE launched a consultation on supporting central counterparties’ (CCPs) acceptance of tokenized forms of eligible collateral.
In this context, CCPs are organizations that sit between two financial institutions, helping to ensure transactions are completed and managing risk if one party fails, while “eligible collateral” refers to assets that a CCP accepts as security against potential losses, much like a house serves as collateral for a mortgage. The BoE wants to explore whether tokenizing these assets could make them faster and easier to transfer, track, and manage.
“Tokenisation could offer opportunities for quicker and more efficient mobilisation and management of collateral, including across jurisdictions,” said the Bank. “This could support firms to respond more effectively to margin calls, improve collateral management and support innovation in central clearing, contributing to the UK’s wholesale digital financial markets strategy.”
The BoE said that the existing regulatory framework is not a barrier for CCPs accepting tokenized forms of eligible collateral, provided the collateral meets the standards required in central clearing.
For example, tokenized collateral must remain capable of being valued, transferred and realized when needed, including in stressed conditions.
To support CCPs and their participants in exploring tokenized collateral, the bank provided a proposed Supervisory Statement—included in the annex to the consultation—that clarifies how the BoE would assess applications involving tokenized collateral.
“Consistent with the principle of same risk, same regulatory outcome, different tokenised collateral arrangements may also achieve those outcomes in different ways,” said the BoE.
The consultation paper is open for feedback until February 12, 2027, and the bank welcomes responses from across the industry, including CCPs and their market participants, infrastructure providers, technology firms, and other stakeholders exploring the use of tokenized collateral in central clearing.
“Through today’s consultation, the Bank is further delivering its secondary objective for innovation in financial market infrastructure, while maintaining financial stability,” Sarah Breeden, Deputy Governor for Financial Stability at the BoE, said. “It’s part of a major agenda between authorities and industry to enable the responsible adoption of tokenisation in financial markets.”
The BoE added that the consultation forms part of the Bank’s broader work with the Financial Conduct Authority (FCA), HM Treasury and the industry to support the responsible adoption of tokenization and provide greater clarity on the future development of U.K. digital wholesale financial markets.
Earlier this year, the FCA finalized its long-awaited digital asset regulatory framework, aimed at making the U.K. a global hub for digital asset technology, including a licensing regime due to come into force in 2027 and specific rules for stablecoins.
Under the incoming rules, firms supporting people to buy, trade and hold digital assets will need to meet clear standards based on the “same risk, same regulatory outcome” principle, including financial resilience requirements such as capital and stress testing, market integrity rules covering areas such as insider trading and market manipulation, consumer duty requirements, and all digital asset firms, including trading platforms, intermediaries, custodians, stablecoin issuers, and firms arranging staking, must obtain FCA authorization to operate in the country.
Until the regime comes into effect, digital asset firms in the U.K. are primarily governed by anti-money laundering (AML) and financial promotion rules, which the FCA continues to enforce rigorously—as digital currency exchange HTX has recently found out.
HTX ordered to stop doing business in the United Kingdom
On October 28, the FCA secured a court-backed agreement with HTX—the Seychelles-based digital currency exchange formerly known as Huobi and owned by crypto-billionaire Justin Sun—that will bar it from knowingly promoting digital asset services unlawfully to U.K. customers.
The finance watchdog took legal action against HTX in October 2025 for breaking U.K. financial promotion rules, which were announced in June 2023 as part of the Financial Services and Markets Act (FSMA) 2023 and came into force on October 8 the following year. The rules amount to an updated version of the previous financial promotions regulation, adding specific rules for “cryptoassets” to those for traditional financial instruments.
Under the new promotions regime, any promotion of digital asset products or services must include a ‘clear warning,’ and firms marketing digital assets to U.K. consumers must introduce a 24-hour cooling-off period for first-time investors to allow them to think about and possibly back out of spur-of-the-moment or potentially unwise investments.
It also introduced only four lawful routes firms can take to communicate digital asset promotions. Namely, by an “authorized person,” as defined by the FCA, which includes ICVC, the Society of Lloyd’s, and persons with Part 4A permission; an unauthorized person can communicate a promotion that an authorized person has approved; the promotion can be communicated by a digital asset business registered with the FCA under the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017 (MLRs); or the promotion meets the conditions of an exemption in the Financial Promotion Order.
Promotions not using one of these legal routes are considered in breach of the rules and thus “a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both.”
Based on the FCA’s legal complaint against HTX, dated October 21, 2025, the exchange published financial promotions on its website and on social media platforms, including TikTok, X, Facebook (NASDAQ: META), Instagram and YouTube, but did not go through one of the four authorized routes and was not an authorized person itself—especially since, as the FCA emphasized, it is run by “persons unknown.”
“HTX operates an opaque organisational structure, hiding the identities of its owners and the operators of its website,” said the regulator. “Repeated attempts by the FCA to engage with HTX have been ignored.”
After the FCA initiated proceedings against HTX, the platform took steps to restrict new U.K. customers from registering accounts. However, existing U.K. users could still log in and access unlawful financial promotions.
According to the FCA’s press release last Thursday, the exchange failed repeatedly to engage with the regulator, instead taking steps to exit the U.K. The FCA and Huobi Global S.A. have now settled the case, with HTX no longer active in the U.K., consumers no longer able to make deposits, and new U.K. users cannot sign up to the platform. HTX has also agreed not to target, solicit or actively seek to engage U.K. consumers.
“Crypto firms should be under no illusion: being based overseas does not put them beyond the reach of UK law,” Steve Smart, executive director of enforcement and market oversight at the FCA, said. “Our action means HTX is leaving the UK and can no longer target UK consumers. The message to other firms is clear: follow the rules or face the consequences.”
While the U.K. clamps down on rogue digital currency businesses, its neighbor to the south is making progress on legislation to tighten the screws on digital currency money launderers and tax evaders.
French Senate adopts bill to implement CARF
The French Senate has adopted a bill to allow tax authorities to automatically exchange digital asset transaction data with their foreign counterparts, bringing the country closer to legislation that would align it with international tax reporting and information exchange standards.
The bill passed its first reading on October 27 and was then progressed to the National Assembly, as Bill no. 3421, for consideration.
If passed into law, it would establish a framework to implement the Organisation for Economic Co-operation and Development (OECD) Crypto-Asset Reporting Framework (CARF), a global tax transparency initiative designed to address tax evasion risks arising from the growth of digital assets, set a standard for tax reporting, and improve the exchange of information between countries on digital asset transactions to combat tax evasion and avoidance.
CARF was developed by the OECD—a global institution that promotes policies to improve world trade and economic progress—through international discussions and consultations during 2021 and early 2022, with the framework officially published by the OECD in June 2023.
Since then, it has gradually gained more countries’ commitment to implementing the framework, with the latest OECD update, from September 2026, stating that 77 jurisdictions have now committed to the rules, including “the vast majority” of digital asset centers.
Along with France, every other European Union nation—bar Cyprus—has also committed to first transfers by 2027, as has the U.K., while the world’s largest digital asset market, the United States, has agreed to exchanges by 2029.
FAQs:
What is tokenized collateral?
A digital version of an eligible asset, such as a government bond, accepted as collateral in trading.
When does the Bank of England tokenized collateral consultation close?
February 12, 2027. The Bank welcomes responses from clearing houses, market participants, infrastructure providers and technology firms.
Why is HTX leaving the UK?
HTX settled an FCA court case over unlawful crypto promotions. Deposits and new U.K. sign-ups have stopped, and HTX agreed not to target U.K. consumers.
What is the penalty for illegal crypto promotions in the UK?
It is a criminal offense, punishable by up to two years in prison, an unlimited fine, or both.
What is CARF?
The OECD’s Crypto-Asset Reporting Framework, a tax standard for reporting digital asset transactions and exchanging that data between countries to combat tax evasion.
Has France adopted CARF?
Not yet. The Senate passed the bill on October 27, and it now goes to the National Assembly as Bill no. 3421.
Related articles
Watch | Tokenization on Public Blockchain: Transforming RWAs and Finance
James Field
James Field is a senior writer and researcher specializing in legal and regulatory developments in fintech. During his decade of experience covering the tech, business and legal sectors he has worked as a deputy editor (in charge of Africa coverage) for the market leading Legal 500, written for various global news, industry and B2B outlets (including Legal Business, Geographical Magazine and Dutch News), and reported from tech events, including London Blockchain Conference and UK House of Lords Finance Summits.
