The UK Financial Conduct Authority has published industry feedback on its plans for tokenized financial markets, drawing 123 responses from industry groups, financial firms and legal academics, Cointelegraph reported. Most of those respondents identified post-trade processes — in particular the movement of collateral between parties — as the main opportunity for tokenization to take hold.
The feedback now feeds into a joint tokenization roadmap being prepared by the FCA and the Bank of England, expected later this year, which will set target dates for the UK’s work on wholesale tokenization, according to Cointelegraph.
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Key facts
- The FCA received 123 responses to its wholesale tokenization consultation.
- Respondents came from industry groups, financial firms and legal academics.
- Most agreed post-trade processes, particularly collateral movement between parties, are the main opportunity.
- The FCA and the Bank of England will use the feedback to develop a roadmap expected later this year, setting target dates for UK wholesale tokenization work.
- The FCA also launched a separate consultation on tokenized gold following respondent feedback.
Post-trade collateral named the clearest use case
The consultation responses point to a specific slice of market infrastructure rather than a broad overhaul of trading. Post-trade activity — settling trades and shifting collateral between counterparties — was singled out by most respondents as where distributed ledger technology offers the most immediate benefit. That focus matters because moving collateral is a back-office function that today relies on chains of intermediaries, and the FCA is exploring how distributed ledger technology could be used across a broader range of wholesale financial markets, including the new workstream on tokenized gold.
The UK effort is running alongside similar discussions elsewhere in Europe, where financial firms are pressing to expand the use of tokenized securities.
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European firms push for looser DLT limits
Last week, a coalition that included Nasdaq, Boerse Stuttgart and Securitize urged EU lawmakers to remove or substantially raise proposed limits on assets admitted to distributed ledger technology infrastructure. That request and the UK consultation responses point in the same direction: firms want rules that allow tokenized instruments to scale rather than caps that hold them back.
Why it matters
The roadmap will give financial firms operating in London their first concrete timeline for how wholesale tokenization is expected to be regulated, replacing the open questions left by the consultation stage. A roadmap with target dates is more useful to firms building settlement and collateral systems than a statement of intent, because it tells them when to expect rule changes. The separate consultation on tokenized gold also signals that the FCA is widening its scope beyond the earliest use cases, and the EU pressure campaign shows UK and European rulemaking are now moving on parallel tracks that firms will have to track at the same time.
What to watch
The next concrete milestone is the joint FCA and Bank of England roadmap due later this year, which will set the target dates for UK wholesale tokenization work. The FCA’s consultation on tokenized gold is also open, and its outcome will show how far the regulator is prepared to extend distributed ledger technology into other wholesale markets.
Reported by cointelegraph.com.
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