UK regulators to develop tokenization roadmap for wholesale markets

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UK tokenization roadmap

Highlights

FCA received 123 responses to its tokenized financial markets proposals, with broad agreement that post-trade activity presents the earliest opportunity for tokenization.
FCA and Bank of England will publish a joint roadmap this year setting target dates for UK wholesale market tokenization initiatives.
European firms and a coalition including Nasdaq are pressuring regulators to accelerate regulatory adaptation and raise DLT asset limits, intensifying regional competition for tokenized securities.

Industry feedback shapes UK plan

As reported by Cointelegraph, citing the Financial Conduct Authority, the regulator has published feedback on its proposals for tokenized financial markets after receiving 123 responses from industry groups, financial firms and legal academics. Most respondents agree that post-trade activity offers the clearest opening for tokenization, especially in the movement of collateral between counterparties.

The FCA says it and the Bank of England will use that feedback to prepare a joint roadmap later this year. That document is expected to set target dates for the UK’s work on wholesale tokenization.

The regulator has also opened a separate consultation on tokenized gold following the responses. The step broadens its review of how distributed ledger technology could be applied across a wider range of wholesale financial markets.

European market pressure builds

The UK initiative develops as financial firms across Europe push for wider use of tokenized securities. The debate is increasingly focusing on how quickly regulators can adapt market rules to support settlement, collateral management and other back-office functions through digital infrastructure.

Last week, a coalition that includes Nasdaq, Boerse Stuttgart and Securitize urged EU lawmakers to remove or significantly raise proposed limits on assets admitted to distributed ledger technology infrastructure. That wider regional push adds pressure on regulators to clarify timelines and rules as competition grows around tokenized market development.

Our earlier coverage on UK regulators’ plans for tokenised gold explained that the FCA, working with the Treasury and the Bank of England, was exploring a bespoke regime to reduce uncertainty around how these products fit under existing fund rules. We noted that officials were weighing targeted exemptions for certain tokenised gold products or related infrastructure, while linking the initiative to improved post-trade efficiency and broader collateral usage in UK wholesale markets.

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