The Bank of England aims to launch a service linking its payment system to other platforms in 2028, the central bank’s head of wholesale settlement innovation experiments said.
The service would coordinate payments across separate systems while allowing money to stay where it is held. The approach seeks to support private innovation while keeping settlement in central bank money.
The official outlined the plans at the 2026 Bank of Korea Payment and Settlement Systems Conference, in a recording published Nov. 11 on the South Korean central bank’s own channel.
“Even as technology evolves, central bank money must continue to provide the foundation,” he said, in remarks translated from Korean. Central banks must adapt how they supply that money to support innovation and protect settlement.
The central bank began rebuilding its real-time gross settlement system, which settles payments individually rather than offsetting them, in 2015 and launched the replacement in April 2025. It expanded payment message data in 2023. The replacement improves access and can technically operate almost around the clock, although operating hours are being extended gradually with industry.
Tokenisation, which represents assets digitally on a shared ledger, could automate transactions and make their progress easier to track. But separate platforms could also create “digital islands”, he said. Adoption remains limited compared with traditional finance, and which assets would benefit most is uncertain.
The central bank is pursuing three approaches: connecting existing systems to new platforms, supplying central bank money directly to external infrastructure, and exploring a shared programmable platform. It has not determined which approach will work best over the longer term.
Its wider work includes a digital securities sandbox with 17 participating firms, allowing businesses to test and expand services under adapted rules. It is also working with Britain’s Treasury on a digital government bond pilot, with a report due early next year.
Digital government bonds issued through that programme would receive the same treatment as conventional bonds in the central bank’s market operations, including use as collateral. The central bank has also updated prudential guidance for tokenised assets. It plans to publish a joint tokenisation roadmap with the Financial Conduct Authority next month.
For the planned linking service, 18 firms joined a laboratory programme using a pilot interface. Their participation helped shape the future service and test demand. More detailed guidance, including on risk management, is due early next year to help businesses prepare.
A separate experimental programme is testing whether settlement can remain trustworthy on shared ledgers the central bank does not control. Tests include saving liquidity and finding new uses for tokenised collateral. A summary report planned for 2027 will assess where tokenisation could deliver the greatest benefits.
International work includes Project Agora, which explores linking domestic payment arrangements with cross-border banking payments. Another experiment with the central banks of Singapore and Thailand examines faster foreign exchange settlement while reducing the funds needed to complete transactions. Results were due within two weeks of the remarks.
The official left open how the market would develop and which settlement model would prevail. The central bank’s task is to preserve trust in money while allowing private firms to develop new services.
