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UK Heightens Tokenization Efforts
In a new policy direction, the UK is bolstering wholesale tokenization efforts, citing multiple effects on the economy. Economic Secretary to the Treasury, Lucy Rigby, said that the new role of a digital asset champion will involve leading and coordinating the private sector’s work on tokenization in financial markets.
Tokenization involves issuing, trading, and settling traditional assets like stocks and bonds using blockchain. Furthermore, the country plans to phase off paper certificates in the market, embracing digital methods. In July, the administration rolled out a Wholesale Financial Markets Digital Strategy to transform the traditional market. In recent months, tokenization has become more mainstream, with several governments adopting broad ideas.
Institutional giants in several jurisdictions have also launched several pilots to achieve objectives. Last month, Chainlink launched a service that allows banks to utilize tokenized investment funds via SWIFT. Similarly, Alpaca launched an Instant Tokenization Network for US stocks in a bid to boost on-chain liquidity.
“ITN’s process is best understood as a single API that enables two functions. The first is the journaling of securities to and from brokerage accounts. This applies to US-regulated financial institutions. The second is delivery of tokens by the issuer to their Authorized Participant, which is typically a non-US entity affiliated with the US institution that initiated the journaling of shares in step one,” the company noted.
 
Last week, Robinhood CEO doubled down on tokenization, stating that it would become the default way of gaining exposure to US stocks for international investors. The company began offering tokenized stocks in June to EU customers. According to him, the service is a freight train that can’t be stopped and will overshadow the financial system.
The UK has set a course to position itself at the center of tokenization, aiming to attract large players. Recently, the country has changed its stance on crypto regulations, taking on a friendly approach in line with global trends. In a major policy change, the Financial Conduct Authority (FCA) approved retail access to crypto exchange-traded products.
Source: https://zycrypto.com/the-uk-mulls-major-crypto-reform-plans-appointment-of-digital-asset-champion/