The Financial Conduct Authority has thrown its weight behind tokenisation technology, unveiling plans to drive innovation across Britain’s £14 trillion asset management industry.
Proposals published today aimed at providing firms with the clarity needed to adopt digital representations of assets on blockchain technology, positioning the UK as a potential world leader in this emerging field.
With approximately 2,600 firms managing assets for UK and global clients, the regulator believes tokenisation could fundamentally reshape how investments are bought, sold and managed with potential reductions in cost and opening up new markets to everyday investors.
“Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers,” said Simon Walls, the FCA’s executive director of markets. “The UK has the opportunity to be a world-leader here and we want to provide asset managers with the clarity and confidence they need to deliver.”
The FCA’s consultation package includes guidance on operating tokenised fund registers under existing rules through a “UK Blueprint model,” alongside a streamlined process for buying and selling fund units whether they are traditional or tokenised.
A roadmap addressing key technical barriers including the use of public blockchains and on-chain settlement, is also part of the proposals, which support the regulator’s broader digital assets strategy.
The move comes as regulators worldwide grapple with how to oversee emerging blockchain-based financial technologies whilst fostering innovation in their domestic markets.
References:
FCA Press Release: https://www.fca.org.uk/news/press-releases/fca-supports-tokenisation
