The U.K.’s financial regulator published guidelines and a roadmap for implementing tokenization, aimed at boosting efficiency and fostering innovation in the country’s £14 trillion asset management sector.
The Financial Conduct Authority (FCA) introduced a strategy to support tokenization — the digital representation of assets using distributed ledger technology (DLT). The measures are designed to enhance transparency and efficiency in capital markets and strengthen the competitiveness of the U.K.’s asset management industry, which includes around 2,600 firms.
According to the press release, tokenization could become a key driver of transformation in the investment industry, reducing costs, speeding up operations, and expanding access to investments. The regulator noted that digital tokenized products could increase competition and offer investors — including retail ones — new, more affordable investment opportunities.
The FCA’s guidance outlines several specific initiatives:
- implementation of the UK Blueprint model, allowing firms to maintain tokenized fund registers in compliance with existing regulations;
- creation of an alternative simplified model for buying and selling shares in both traditional and tokenized funds;
- development of a roadmap to remove barriers to the full transition toward using public blockchain networks and settlement directly on-chain;
- discussion of potential regulatory adjustments as tokenization models evolve.
Simon Walls, FCA Interim Executive Director of Markets, stated that tokenization technology could fundamentally reshape asset management, benefiting both the industry and investors. He emphasized that existing regulations already permit firms to take steps in this direction, while the new measures will provide them with the clarity and confidence needed to continue innovating.
The FCA highlights that these initiatives form part of a broader digital assets roadmap aligned with commitments outlined in the regulator’s letter to the U.K. Prime Minister regarding support for economic growth. According to the authority, tokenization will not only improve data exchange efficiency among market participants but also simplify private investors’ access to infrastructure and alternative investments.
The United Kingdom is striving to secure its position as a global hub for innovation in asset management, providing a transparent and secure foundation for integrating new digital technologies into the country’s financial ecosystem. Thanks to these efforts, the U.K. ranked first in Europe in CoinsPaid’s crypto adoption index.
