UK sets tokenized finance roadmap as market push targets annual economic boost

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UK tokenized finance roadmap

Highlights

UK government roadmap urges prioritization of the Digital Gilt Instrument (DIGIT) pilot with a target for first issuance in Q1 2027.
The report estimates the global tokenized asset market could grow from $23 billion today to $88 trillion by 2035, highlighting major potential economic gains.
Industry participants stress the need for real-time settlement, cross-border payment rails, and interoperability across stablecoins, tokenized deposits, and fiat to support tokenized markets.

Government roadmap targets digital gilt launch

As reported by The Block, the first report from the government's Wholesale Digital Markets Champion, Christopher Woolard, centres on tokenized government bonds, stablecoins and onchain settlement as the UK seeks to strengthen its position as a global crypto and digital finance hub.

The report says tokenization is moving beyond experimentation and becoming a core part of the next generation of financial markets. It warns that without a clear strategy, the UK risks losing liquidity, influence and market share as other jurisdictions advance their own digital market structures.

Among the main recommendations, the roadmap calls on the UK to prioritise its Digital Gilt Instrument, or DIGIT, pilot and aim for a first issuance in the first quarter of 2027. It also urges wider use of tokenized collateral and development of payment rails capable of settling tokenized assets and stablecoins, alongside legal and tax standards intended to give institutions confidence to adopt the technology.

Infrastructure needs shape wider market impact

The report estimates the global tokenized asset market could reach $88 trillion by 2035, from roughly $23 billion today, based on The Block's estimates, although other industry trackers put the current market closer to $36 billion. That projected expansion underpins the UK's argument that faster policy and infrastructure work could translate into significant economic and fiscal gains.

Industry participants say the roadmap addresses a crucial gap between tokenized assets and the payment systems needed to support them. Ripple Head of Policy UK & Europe Matthew Osborne says tokenization is already producing onchain funds, bonds and repo that are more liquid, mobile and efficient than legacy alternatives, while Banking Circle Chief Digital Assets Officer Kirit Bhatia says tokenized markets will require real-time settlement, cross-border functionality, multiple forms of regulated money and interoperability across stablecoins, tokenized deposits and existing fiat rails.

Our earlier coverage of the U.S. Senate’s Clarity Act explained how the bill is intended to set a broad regulatory framework for crypto markets, but faces a more uncertain path after Sen. Lindsey Graham’s death narrowed the Republican majority. We noted that while major crypto firms support the measure as a way to attract capital and clarify rules, critics including banks and other groups are pushing back over stablecoin-related risks and tougher ethics requirements for officials.

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