UK allows asset managers to use blockchain…reveals 'tokenized funds' roadmap

The UK Financial Conduct Authority (FCA) announced a roadmap allowing asset managers to tokenize funds (tokenization) using blockchain. The move is seen as part of regulatory innovation to improve fund management efficiency and promote competition.

On the 14th (local time), Cointelegraph reported that the FCA said in its announcement, "Through this roadmap, we will provide clear guidelines to enable asset managers to adopt blockchain-based tokenization," adding, "It will drive innovation and growth in the asset management industry."

Simon Walls (FCA head of markets) said, "Tokenization has the potential to drive fundamental change in asset management," and, "There is much that can be done within existing regulations, and this move will make more innovation possible."

The regulator said tokenized funds are expected to provide various benefits, including ▲improved trading efficiency ▲cost reduction ▲expanded access to private and infrastructure markets. It said that by digitizing fund management processes, data management and settlement costs can also be reduced.

Meanwhile, the UK government has been actively pursuing blockchain policy. Last week it lifted the ban on retail trading of crypto exchange-traded notes (ETNs) and allowed trading on approved exchanges in the UK.