UK Set to Let Asset Managers Adopt Blockchain for Tokenized Funds

The United Kingdom is taking a major step toward integrating blockchain into its financial system, as the Financial Conduct Authority (FCA) unveiled a detailed roadmap to allow asset managers to tokenize investment funds. The regulator said the initiative aims to boost innovation, streamline fund operations, and give firms more clarity on using blockchain under existing laws.

Simon Walls, executive director of markets at the FCA, said tokenization could “drive fundamental changes” in how asset managers operate, helping reduce costs and broaden access to investment opportunities. Tokenized funds, which use blockchain to represent ownership digitally, can cut reconciliation expenses, improve data sharing, and increase competition across the sector.

The FCA’s plan includes new guidance for managing tokenized fund registers under the UK’s Blueprint model and a framework for processing both traditional and blockchain-based fund units. It also outlines a roadmap for blockchain settlement systems, signaling that regulators are preparing for a digital overhaul of the country’s asset management infrastructure.

Walls added that the UK has “the opportunity to be a world leader” in tokenized finance and said the FCA will explore how its regulations should evolve as blockchain adoption accelerates.

The move follows mounting pressure from the crypto industry, including Coinbase’s petition urging the UK government to develop a pro-innovation blockchain and stablecoin framework. Critics had warned that Britain was falling behind global competitors in digital finance.

After years of cautious regulation, the shift appears real. The FCA recently lifted its 2019 ban on crypto exchange-traded notes for retail investors, and the Bank of England is reportedly reconsidering limits on corporate stablecoin holdings—marking a clear sign that London wants to reclaim its position as a global financial innovation hub.