The United Kingdom’s Financial Conduct Authority (FCA) has introduced a new roadmap designed to help asset managers embrace blockchain and tokenization, aiming to enhance efficiency, reduce costs, and encourage competition within the sector.
In its Tuesday announcement, the FCA said the initiative will “provide firms with additional clarity” to move forward with tokenization while “driving innovation and growth in asset management.”
Simon Walls, the FCA’s executive director of markets, emphasized the potential of the technology: “Tokenization has the potential to drive fundamental changes in asset management, with benefits for both the industry and consumers. There are already many opportunities under our existing rules, and even more with the changes we’re now proposing.”
FCA’s Plan for Tokenized Funds
The roadmap outlines several key steps, including guidance for maintaining tokenized fund registers under current regulations through the UK Blueprint model. It also proposes a simplified framework for handling both traditional and tokenized fund units, as well as exploring blockchain-based settlement processes.
The regulator plans to review and adapt its rules as tokenization becomes more common. “The UK has the opportunity to be a world leader here,” Walls said, “and we want to give asset managers the confidence and clarity to deliver.”
Industry Push for Pro-Blockchain Policies
In recent months, industry leaders have been urging UK authorities to take a more proactive approach to blockchain adoption. Coinbase, for instance, launched a public petition calling for a national strategy covering stablecoin regulation, tokenization, and even the appointment of a dedicated “blockchain czar.”
UK’s Crypto Stance Under Fire
Despite progress, the UK government has faced criticism for being slow to act. Analysts at the Official Monetary and Financial Institutions Forum (OMFIF) warned earlier this year that Britain has lost its early advantage in distributed ledger finance.
Signs of Change
The UK’s approach to crypto regulation has drawn criticism from industry stakeholders. In June, analysts from the Official Monetary and Financial Institutions Forum (OMFIF), an independent think tank, warned that Britain has squandered its early lead in distributed ledger finance.
In July, Coinbase also released a satirical video titled “Everything is Fine,” taking aim at Britain’s financial system. The footage used lyrics and music that brag about the country’s strong finances while depicting scenes of inflation, poverty and financial struggles.
The industry pressure appears to have paid off. Last week, the FCA lifted its 2019 ban on crypto exchange-traded notes (ETNs) for retail investors, allowing trading on FCA-approved, UK-based exchanges.
Furthermore, the Bank of England is reportedly easing proposed limits on corporate stablecoin holdings, considering exemptions for firms needing larger fiat-backed reserves.