FCA Unveils Tokenisation Roadmap to UK’s £14 Trillion Asset-Management Sector
Britain’s financial watchdog has taken a step closer to bringing investment funds onto the blockchain, releasing proposals designed to make tokenised products a mainstream option for asset managers and their clients.
The Financial Conduct Authority (FCA) said in CP25/28: Progressing Fund Tokenisation that it wants to give firms “clarity and confidence” to use distributed ledger technology (DLT) for recording and trading fund units. The move follows two years of pilot work between the regulator, the Treasury, and the Bank of England under the country’s .
The UK hosts roughly 2,600 asset managers overviewing about £14 trillion in client assets. For them, tokenisation — the digital representation of fund units or assets on a blockchain — promises lower costs, quicker settlement, and potentially new investor access routes.
“Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers,” said Simon Walls, the FCA’s executive director of markets. “We stand ready to design the next stage with the industry — this publication suggests a path.”
A Three-Stage Blueprint
The paper builds on a 2023 Blueprint published by the Investment Association’s Technology Working Group, which sketched out a phased roadmap for fund tokenisation. The FCA’s latest consultation fleshes out that framework.
First, it provides guidance on tokenised fund registers, allowing managers to keep investor records on DLT systems under existing rules. Second, it introduces an alternative dealing model that would let investors purchase or trade units directly on-chain, rather than through intermediaries. And third, it maps out future steps such as using , which would eventually connect with the Bank of England’s sandbox and potential digital-pound infrastructure.
Britain is catching up with the , which has already viewn Luxembourg and Ireland approve tokenised funds. In the US, Franklin Templeton and BlackRock have launched blockchain-based money market funds, while Singapore’s central bank has opened its Project Guardian tokenisation framework to global .
In the UK, platforms such as Archax and fund groups including abrdn have already run limited pilots, tokenising fund units and testing on-chain registers. The FCA’s proposals would move those experiments toward a commercial footing.
The regulator said tokenisation could “reduce the costs of sharing and reconciling data” between fund operators, custodians, and distributors, cutting back-office duplication that can add millions to annual running costs. It also views potential to open up private-market and to retail clients through fractional ownership.
The document cautions that the technology still needs guardrails. Firms would have to maintain off-chain backup registers, ensure systems are resilient to outages, and comply with existing consumer-protection and anti-money-laundering standards. The FCA also stops short of allowing unbacked cryptoassets inside regulated retail funds, focusing instead on the plumbing rather than the portfolios.
London’s asset-management sector has long been a pillar of the UK’s financial industry. Policymakers now view tokenisation as one way to keep the city competitive as data-driven finance matures elsewhere. The initiative also ties into the Treasury’s broader digital-assets roadmap and the Bank of England’s parallel work on the Digital Securities Sandbox.
For now, fund managers don’t need to wait for new laws to begin experimenting. The rules already allow tokenised registers and DLT-based operations — provided firms meet the identical consumer and operational standards that apply to traditional funds.
The consultation closes later this year, with feedback expected to shape a second phase that could eventually view on-chain settlement and digital cash integrated into the UK’s regulated fund ecosystem.
