UK financial taskforce advances tokenization push across wholesale markets

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UK tokenization taskforce advances

Highlights

HM Treasury's Wholesale Digital Markets Champion Chris Woolard leads a taskforce of over 50 firms, including BlackRock and Goldman Sachs, advancing live tokenization use cases in UK wholesale markets.
Woolard's report projects tokenization could generate up to 33 billion pounds in annual economic output and 14 billion pounds in annual tax revenue for London by 2035.
Boston Consulting Group estimates the tokenized real-world asset market could reach $88 trillion by 2035, vastly outpacing today's $3 trillion crypto and stablecoin market.

Government-backed group sets one-year tokenization agenda

As reported by CoinDesk, citing HM Treasury's Wholesale Digital Markets Champion Chris Woolard, the UK initiative brings together more than 50 financial firms including BlackRock, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley and UBS to work on live tokenization use cases across wholesale markets.

The group is backed by the City of London Corporation and is led by Woolard, the former chair of the Financial Conduct Authority. Its first phase centers on tokenized repo, as policymakers and market participants test how distributed ledger technology can be integrated into existing market infrastructure.

Woolard says tokenized markets are a "network game" and warns that the UK's position is not assured unless it moves as quickly as more agile jurisdictions. His report is addressed to the UK chancellor and frames tokenization as a competitive issue for London's role in global finance.

London eyes productivity gains and global market role

The push comes as other jurisdictions, including the U.S. and the European Union, also examine how tokenization can be applied to traditional finance. One estimate from Boston Consulting Group puts the tokenized real-world asset market at $88 trillion by 2035, far above the current crypto and stablecoin market of about $3 trillion.

Woolard's report says the main opportunities lie in productivity and cost efficiencies that could support major trading centers such as London. It projects as much as 33 billion pounds in additional annual economic output and 14 billion pounds in annual tax revenue by 2035.

Kirit Bhatia, chief digital assets officer at Banking Circle, says a key challenge will be ensuring tokenized assets can be funded, settled, mobilized as collateral and transferred across different networks. He adds that tokenized markets will require payment infrastructure capable of real-time settlement, cross-border transfers, multiple forms of regulated money and interoperability between stablecoins, tokenized deposits and existing fiat rails.

Our earlier report on the UK’s tokenisation roadmap outlined a 12-month plan led by Treasury-appointed champion Chris Woolard to digitise wholesale markets. It highlighted priorities including a blockchain-based sovereign bond and proving tokenised assets can be used as collateral in repo transactions, alongside estimates of potential gains to output and tax receipts if the UK moves quickly amid global competition.

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