City Minister Lucy Rigby discussed measures to advance tokenization at IFGS (UK Fintech Week) this week. As previously reported, measures include a single framework for traditional and tokenized payments, including stablecoins and tokenized deposits. The goal is part of the policy to “cement UK as world leader in Fintech.”
Richard Baker, CEO & founder of Tokenovate, shared his opinion on the announcement, expressing concern as to whether regulatory updates will translate into changes to market infrastructure. As Baker has expressed in the past, he worries that tokenization will simply be bolted on top of existing operations, thereby muting any gains.
“The focus on integrating tokenized instruments into core financial services regulation marks a welcome step in strengthening the UK’s competitive edge and driving digital asset tokenization, reinforcing its position as a global leader in fintech innovation,” said Baker. “The direction set out today supports a more coordinated approach to modernising market infrastructure and the opportunity now rests in ensuring tokenisation delivers meaningful gains through real changes in post-trade processes, rather than remaining layered onto legacy fragmentation.”
He explained that interoperability, synchronised data and lifecycle consistency are needed to accomodate the tranistion.
“Frameworks like the Common Domain Model (CDM) and Digital Regulatory Reporting (DRR) will play an important role in enabling consistent workflow processing of tokenized assets across infrastructures and reducing friction across fragmented systems,” stated Baker.
He added that he would like to see more funding for the Center for Finance, Innovation, and Technology (CFIT), as this would drive greater industry coordination and standardization. He feels this would help to turn collaboration into real progress, mitigating intrinsic challenges.