UK Finance calls on government to establish tokenised stocks and bonds roadmap

Industry trade association UK Finance has published a startling new report which says that the country’s position as a leading financial centre is under threat if it fails to establish a roadmap for digital representations of stocks, bonds, loans and real estate.

In a new report produced in conjunction with consultants Oliver Wyman, UK Finance notes that issuance of tokenised assets – the digital representation of real financial assets that can be exchanged on distributed ledger technology (DLT) – in the UK is significantly behind markets such as France, Germany, Hong Kong and Singapore. It found that digital bond issuance represented just 1 per cent of the $20.6 trillion of long-term fixed income issued in 2021.

The report sets out three key ‘missions’ to accelerate the digital transformation of the UK’s capital markets, and argues that “failure to act will result in the UK losing an opportunity to consolidate its position as a top global financial centre.”

The three missions detailed in the report include: Enable innovation and experimentation, underpinned by legal and regulatory certainty; Foster a flourishing UK digital market by promoting interoperability and safe innovation at-scale, and; Become a leader in global standards for the tokenised securities market.

Within these mission statements, UK Finance calls for collaboration between a variety of entities, such as arguing that “HM Treasury, the Financial Conduct Authority (FCA), and the Bank of England should encourage industry participants to convene and develop voluntary standards around tokenised securities,” and that “the FCA, the PRA and the Bank of England should provide further flexibility on Central Securities Depositories Regulation (CSDR) and any provisions to allow industry participants to navigate the requirements to use a CSD.”

The full report entitled ‘Unlocking the power of securities tokenisation’, concludes that the tokenisation of securities could improve the financial system’s operational efficiencies but that these benefits have yet to be realised at scale as the markets, globally and in the UK, are in their infancy.

Commenting on the report, Bob Wigley, chair of UK Finance, said: “Securities tokenisation is likely to transform financial markets, through delivering lower costs, lower risks, and wider market access. But without continued bold action the UK risks falling behind other jurisdictions.

“The opportunities that tokenisation presents are substantial and given the UK is a leading global financial centre, we need to be at the forefront of developments.”

    Share Story:

Recent Stories


Safeguarding economies: DNFBPs' role in AML and CTF compliance explained
Join FStech editor Jonathan Easton, NICE Actimize's Adam McLaughlin and Graham Mackenzie of the Law Society of Scotland as they look at the role Designated Non-Financial Businesses and Professions (DNFBPs) play in the financial sector, and the challenges they face in complying with anti-money laundering and counter-terrorist financing regulations.

Ransomware and beyond: Enhancing cyber threat awareness in the financial sector
Join FStech editor Jonathan Easton and Proofpoint cybersecurity strategist Matt Cooke as they discuss the findings of the State of the Phish 2023 report, diving into key topics such as awareness of cyber threats, the sophisticated techniques being used by criminals to target the financial sector, and how financial institutions can take a proactive approach to educating both their employees and their customers.

Click here to read the 2023 State of the Phish report from Proofpoint.

Cracking down on fraud
In this webinar a panel of expert speakers explored the ways in which high-volume PSPs and FinTechs are preventing fraud while providing a seamless customer experience.

Future of Planning, Budgeting, Forecasting, and Reporting
Sage Intacct is excited to present FSN The Modern Finance Forum’s “Future of Planning, Budgeting, Forecasting, and Reporting Global Survey 2022” results. With participation from 450 companies around the globe, the survey results highlight how organisations are developing their core financial processes by 2030.