The Association for Financial Markets in Europe (AFME) says the UK must lead in the development of distributed ledger technology (DLT) capital markets. Otherwise known as blockchain, in a recent statement, AFME noted that “without a clear national vision and urgent coordinated action, the UK risks falling behind other international financial centres that are accelerating adoption of DLT-based solutions and DLT-based activities will move away from the UK.”
This is already happening.
In the US, the Trump administration is aggressively pursuing updated rules to enable digital asset innovation. Stablecoin legislation (the GENIUS Act) has been signed into law, and a market infrastructure bill has been passed in the House and is now working its way through the Senate. The legislation is expected to be ready to be signed into law in the first quarter.
AFME says the initial steps in the UK, under the guise of the Digital Securities Sandbox and the DIGIT Pilot sovereign debt program, are significant. Still, more needs to be done for the UK to emerge as a global hub for digital assets.
The UK has all the ingredients to lead the next generation of capital markets globally. DLT offers the opportunity to make markets more efficient, innovative, and accessible, but to fully realise this potential, the UK needs to deliver on an ambitious vision, implement timely policy frameworks, and pursue proactive public sector deployment. Given the pace of policy changes and innovation internationally, the time to act is now,” says Coco Chen, Associate Director of Technology and Operations at AFME
AFME points to the real-world benefits of the new technology while calling on constituent parties to “adopt this vision and implement decisive measures to ensure the UK capital markets remain globally pre-eminent and at the forefront of DLT-based innovation.”
Benefits as outlined by AFME include faster, safer settlement and greater market access for investors and corporates. This all could benefit the broader UK economy, driving innovation and economic growth.
AFME hits the nail on the head. More action is needed, not more talk. While change is hard, the ramifications of inaction or hesitancy could be more detrimental.
