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The Bank of England has opened a consultation to figure out a way for clearing houses to accept tokenized collateral in the UK. 
On the same day, the US SEC received a 238-page report from a crypto trade group suggesting that regulation of vaults should be dependent on the extent of human control over deposits.&nbsp;
<h3 id="span-style-font-weight-400-britain-s-regulator-makes-the-first-move-span-span-style-font-weight-400-span">Britain’s regulator makes the first move&nbsp;</h3>
The<a href="https://www.bankofengland.co.uk/paper/2026/cp/supervisory-expectations-for-ccps-seeking-to-accept-tokenised-collateral" rel="noopener noreferrer nofollow">rule book</a> of the Bank of England allows central counterparties to accept digital forms of collateral they accept currently. Central counterparties act as intermediaries between buyers and sellers, and they guarantee trades clear.&nbsp;
The statement clarifies what exactly the Bank is looking out for when a clearing house makes an application to use tokenized assets under current rules.&nbsp;
The Bank has laid out one condition, though, and it is that tokenized collateral must retain its ability to be valued, transferred and realized even when under stress.&nbsp;
Sarah Breeden, who serves as the Deputy Governor for Financial Stability at the Bank of England,<a href="https://www.bankofengland.co.uk/news/2026/october/bank-of-england-sets-out-approach-to-tokenised-collateral-in-central-clearing" rel="noopener noreferrer nofollow">said,</a> “It’s part of a major agenda between authorities and industry to enable the responsible adoption of tokenization in financial markets.”&nbsp;
From now until February 12, 2027, the consultation will remain open.&nbsp;
The proposal allows clearing houses to accept only highly liquid collateral, which has minimal credit and market risk. Also, the collateral should include eligible assets covering cash, financial instruments, bank guarantees and gold.&nbsp;
<h3 id="span-style-font-weight-400-part-of-a-wider-push-in-the-uk-span-span-style-font-weight-400-span">Part of a wider push in the UK&nbsp;</h3>
The proposal is just one piece of a larger financial puzzle. Earlier this year, the Financial Conduct Authority and the Bank of England both called for<a href="https://www.fca.org.uk/publications/calls-input/call-input-future-tokenisation-joint-vision-authorities-uk-wholesale-markets" rel="noopener noreferrer nofollow">input on tokenization</a>. And it had 123 responses across the industry, from firms to legal academics, etc.&nbsp;
Most of the responses sang from the same hymn sheet; the biggest opportunity is still post-trade activity, especially how collateral is moved between parties&nbsp;
On October 21, the FCA launched<a href="https://www.cryptopolitan.com/blockchain-groups-sec-fca-defi-consultations/" rel="noopener noreferrer nofollow">two consultations</a>. One is on cryptoasset exclusions and the other on decentralized finance. The two of them will close on the 18th of November, with final guidance in January 2027.&nbsp;The wider UK cryptoasset regime takes effect on October 25, 2027.&nbsp;
<h3 id="span-style-font-weight-400-across-the-atlantic-industry-drafts-the-playbook-span-span-style-font-weight-400-span">Across the Atlantic, industry drafts the playbook&nbsp;</h3>
Just across the Atlantic, the exact opposite is in full display. Over in the US, the playbook is being drafted by a crypto group, the Crypto Council for Innovation (CCI).&nbsp;Members of the council, like Bitwise, Galaxy Digital, and Morpho, laid the&nbsp;<a href="https://cryptoforinnovation.org/wp-content/uploads/2026/10/CCI-Under-Control-A-Framework-for-Applying-the-Federal-Securities-Laws-to-Crypto-Vaults.pdf" rel="noopener noreferrer nofollow">238-page report</a> at the feet of the SEC, asking for clarity as to how the securities law would apply when software takes the job of financial middlemen.&nbsp;&nbsp;&nbsp;
The crux of the matter is vaults. Vaults are smart contracts that accept token deposits while lending and investing the deposits.&nbsp;
Vaults currently have at least $131 billion worth of assets sitting in them, as of April 2026. This is based on S&amp;P Global Ratings. Vaults are considered attractive now, even attracting interest from firms like Apollo Global Management and Société Générale. Not bad for a former DeFi feature.
&nbsp;“A vault is infrastructure,” CCI’s Alison Mangiero<a href="https://www.cryptoinamerica.com/p/exclusive-crypto-vaults-put-90-year" rel="noopener noreferrer nofollow">stated.</a>&nbsp;
<h3 id="span-style-font-weight-400-the-fight-is-over-human-control-span-span-style-font-weight-400-span">The fight is over human control&nbsp;</h3>
The main argument by CCI relates to how a vault is regulated. The group argues for regulation that relies on how much discretion human operators keep versus investor assets. There should be a difference between a vault that lends stablecoins by fixed rules and one that allows an operator to choose investments or redirect cash.&nbsp;
Most vaults are a mix of both, but based on CCI’s proposal, if a vault cedes more control to the operator, then it should be treated like a security.
A control test is suggested in the report. The control test is similar to the standard set in the CLARITY Act. The standard was known as “decentralized-in-name-only”.&nbsp;
CCI wants the SEC to adopt its ETF approach. The group also called for independent audits and mechanisms to pause vaults during security incidents, even though such steps may not help in recovering looted funds in the event of a hack.
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UK writes the tokenization rulebook as US industry pitches its own to the SEC

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