Has the UK finally woken up to the issue of digital assets? The Financial Conduct Authority (FCA) has just published a detailed plan for asset managers looking to implement blockchain to tokenize funds. Better late than never, although the competition (meaning the whole world) is not sleeping.
The UK is tokenizing – breakthrough or catching up?
In its announcement on Tuesday, the FCA said it was about “greater clarity” for firms and “driving innovation in asset management”. Simon Walls, executive director of markets at the FCA, does not hide his enthusiasm:
Tokenization has the potential to fundamentally change asset management, bringing benefits to the industry and consumers
Regulators see this as a real opportunity. Tokenized products can increase competition, reduce costs and (crucially) open access to investment, particularly in private and infrastructure markets. Digitization of fund operations also means lower costs of data reconciliation and reporting.
What exactly is changing?
The FCA’s plan includes guidance for tokenized fund registers under the UK Blueprint model, a simplified framework for processing both traditional and tokenized fund units, and a roadmap for blockchain-based settlements. The regulator also announces an analysis of how regulations should evolve as tokenization spreads.
The UK has the opportunity to become a global leader and we want to give asset managers the clarity and certainty they need
– adds Walls. Bold words, especially in a country where cryptocurrency regulations are going in a very bad direction. Moreover, the government is trying very hard to push the Britcoin project, i.e. the British CBDC, which is massively rejected by society.
The criticism continues
The British approach to cryptocurrency regulation has attracted a lot of criticism. In June, analysts at OMFIF warned that the UK had squandered its early lead in distributed ledger finance. In July, Coinbase published a satirical video called “Everything is Fine”, mocking the British financial system against the backdrop of inflation and poverty.
A month earlier, Coinbase also launched a petition calling on the government to create a pro-innovation strategy for blockchain and stablecoins. Is FCA’s new roadmap finally the answer? The next months will show
