The U.K. could generate up to £33 billion in additional annual economic output and about £14 billion in annual tax revenue by 2035 if its tokenization market develops successfully.
Christopher Woolard, the U.K.’s Wholesale Digital Markets Champion, released the first Wholesale Digital Markets Champion report, outlining a roadmap for the digital transformation of wholesale financial markets. The report was developed in collaboration with an industry task force that includes more than 50 financial services firms, as well as representatives from HM Treasury, the Bank of England, the Financial Conduct Authority (FCA), and other market participants.
According to the report, the U.K. currently processes more than £4 trillion in securities transactions each day. The global market for tokenized assets could expand from $30 billion in 2025 to $88 trillion by 2035, accounting for about 16% of the world’s investable assets. The market alone grew 300% in 2025.
The report argues that expanding digital market infrastructure will help the U.K. maintain its position as one of the world’s leading financial centers and prevent liquidity from shifting to competing jurisdictions. Its authors say the country must move beyond isolated pilot projects and accelerate the large-scale deployment of digital market infrastructure.
The report identifies several key benefits of tokenization:
- improving capital efficiency;
- accelerating settlement and reducing operating costs;
- expanding secondary markets for digital assets;
- creating new revenue opportunities for banks, exchanges, and asset managers;
- strengthening the international competitiveness of the U.K.’s financial sector.
To execute the strategy, the government established the Digital Markets Champion Industry Taskforce, which will focus on implementing the roadmap’s priority initiatives over the next 12 months. These include:
- launching scalable markets for tokenized assets;
- expanding the use of tokenized collateral;
- establishing a market for tokenized investment funds;
- modernizing payment infrastructure;
- strengthening legal certainty;
- enhancing the regulatory framework;
- developing common interoperability standards;
- strengthening financial crime prevention;
- creating a technology-neutral tax framework;
- improving the resilience of digital market infrastructure.
One of the initiative’s flagship projects is the Digital Gilt Instrument (DIGIT), a pilot program to issue U.K. government bonds in tokenized form. The report says the U.K. aims to become the first G7 country to issue sovereign debt using distributed ledger technology. The inaugural issuance is scheduled for no later than the first quarter of 2027.
The report also highlights several projects that have already moved beyond the pilot stage. In July 2025, Lloyds Banking Group, Aberdeen Investments, and Archax became the first firms in the U.K. to use tokenized government bonds and tokenized money market fund units as collateral for foreign exchange transactions. In September 2025, London Stock Exchange Group launched its Digital Markets Infrastructure platform and completed its first transaction covering the full tokenization lifecycle for private funds, from issuance through secondary market settlement.
The report’s authors argue that the global digital asset market has entered a period of intensifying competition among jurisdictions. Unless the U.K. accelerates tokenization, key market standards, infrastructure, and liquidity could migrate overseas, weakening London’s position as a global financial center.
It’s worth noting that in October 2025, the FCA published guidance and a roadmap for implementing tokenization across the U.K. The initiative aims to improve market efficiency and foster innovation in what the regulator described as one of the key drivers reshaping the broader investment industry.
