UK FCA Advances to Boost Tokenization in Asset Management

• The FCA is introducing new regulatory proposals to integrate tokenization into the UK’s asset management sector.
• Key initiatives include clear guidelines for tokenized funds, simplified trading models, and plans for fully blockchain-based settlements.
• A Digital Securities Sandbox will allow firms to test blockchain products, unlocking a $14 trillion market by 2030.

The UK’s Financial Conduct Authority (FCA) is pushing forward with plans to make tokenization a key part of asset management. Notably, tokenization involves turning real-world assets into digital tokens using blockchain technology, which could revolutionize the industry by making it more efficient and accessible.

The FCA’s new initiatives aim to create a clear regulatory framework for tokenized assets, helping firms stay competitive and unlocking opportunities for investors. Currently, the UK is home to 2,600 asset management firms managing £14 trillion in assets globally.

FCA’s Approach to Tokenization

The FCA is introducing several steps to support tokenization in asset management:

• Guidelines for Tokenized Funds: The FCA plans to provide clear rules for how tokenized funds can be managed and issued within the current regulatory system.

• Simplified Trading Models: The FCA is working on a more straightforward model for buying and selling both traditional and tokenized funds, making it easier for firms to adopt blockchain technology.

• Advancing Tokenization: The FCA is developing a plan to fully integrate tokenization into mainstream asset management, including using public blockchains and enabling blockchain-based settlements.

As tokenization grows, the FCA will adapt its regulations to keep up with the evolving technology.

Related: UK’s FCA to End Retail Ban on Crypto ETNs Beginning October 8

Digital Securities Sandbox

Alongside these proposals, the FCA and the Bank of England are launching a Digital Securities Sandbox.

This will let firms experiment with blockchain-based financial products in a controlled environment, allowing them to test new ideas without traditional regulatory limits. This could lead to faster, cheaper transactions and better security in the future.

A $14 Trillion Market

Tokenization could unlock a $14 trillion market by 2030. Major financial institutions and central banks are already showing interest. By breaking down barriers and speeding up transactions, tokenization could transform the investment landscape.

The FCA’s plans aim to keep the UK at the forefront of this transformation, setting a global example for how to regulate tokenized assets in financial markets.

Related: Citi Builds a Regulated Custody Services Track for 2026 as RWA Tokenization Grows