Bank of England Taps Chainlink to Test On-Chain Settlement With Central Bank Money

On February 10, 2026, Chainlink confirmed that has partnered with the Bank of England to test on-chain settlement involving central bank money and tokenized assets, marking a significant step in the UK’s push to modernize financial market infrastructure.

The collaboration sits at the intersection of traditional finance and programmable blockchains, focusing on whether core central bank functions can safely operate alongside decentralized systems.

Testing “Synchronization” Between Central Bank Money and Blockchains

At the heart of the initiative is a concept known as synchronization. In practical terms, this means enabling central bank money to trigger actions on-chain, while on-chain events can simultaneously prompt updates within legacy financial systems.

To achieve this, the Bank of England is using Chainlink’s decentralized oracle technology as a secure bridge between conventional ledgers and external blockchain networks. Oracles act as trusted middleware, ensuring that data and instructions can move reliably between off-chain systems and smart contracts.

This approach allows the BoE to explore how wholesale central bank money, used by financial institutions rather than the general public, could be settled directly on programmable ledgers without relying on private stablecoins or multiple intermediaries.

Focus on Wholesale Settlement, Not Retail Payments

The current testing phase is explicitly aimed at wholesale settlement, where large financial institutions exchange high-value assets. By examining whether central bank money can settle tokenized assets on external blockchains, the BoE is assessing potential efficiency gains, reduced counterparty risk, and faster settlement finality.

If successful, this model could streamline institutional transactions such as collateral movements, securities settlement, and derivatives margining, while preserving the safety guarantees associated with central bank money.

Part of a Broader UK Digital Finance Push in 2026

The Chainlink partnership aligns with several major UK regulatory and policy milestones scheduled for 2026:

• Synchronization Lab: The Bank of England plans to launch a dedicated lab later in 2026 to test real-world synchronization use cases before any production deployment.
• Digital Pound Blueprint: The BoE and HM Treasury are expected to publish a definitive framework for a potential UK digital pound (CBDC).
• Tokenized Collateral Rules: By year-end 2026, the BoE aims to clarify how tokenized assets can be used as regulatory collateral in derivatives markets.
• Stablecoin Oversight: The Financial Conduct Authority and the BoE are finalizing codes of practice for systemic stablecoins, potentially allowing regulated issuers to hold deposits directly with the central bank.

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