Tokenization is quickly becoming commonplace, and it is vital that regulators and policymakers work in concert with both current industry participants and future firms that will eventually incorporate digital assets, including tokenized securities.
The Bank of England and the UK Financial Conduct Authority issued a statement today announcing that they are seeking feedback on tokenization to support innovation while safeguarding the financial ecosystem.
CI received several comments on the policy statement and request for comments. Coinbase Europe Head of Policy Katie Harries said it was fantastic that the UK is setting out a clear vision for tokenization in wholesale markets.
“The ambition should be this: anyone, anywhere, should be able to access global equities — and fractions of them — on their smartphone, to self-custody those assets, send them peer to peer, and borrow against them. Delivering this model of tokenization requires an embrace of DeFi. The opportunity is huge — not only for companies seeking new pools of capital, but for the ‘unbrokered’: the many individuals globally who are not able to participate in capital markets today.”
Harries said that financial participation generates wealth, and the UK can deliver meaningful benefits by taking an ambitious, forward-looking approach to tokenization.
CEO & Founder of Tokenovate, Richard Baker, said the announcement accelerates the movement of tokenization in the UK, moving from policy to production and providing greater certainty on collateral and settlement.
“The Bank’s planned synchronization service is especially encouraging. By coordinating cash and asset movements, it tackles one of the key infrastructure challenges in tokenized markets. The focus must now be on making sure tokenization operates continuously and consistently across venues, rather than adding another layer to fragmented post-trade processes,” stated Baker. “To achieve this, firms will need automated workflows, shared data standards, and lifecycle consistency. Frameworks such as the Common Domain Model and Digital Regulatory Reporting will be fundamental to ensuring tokenization delivers real market modernization, instead of another set of disconnected systems.”