The UK Financial Conduct Authority (FCA) has announced a roadmap to support the Tokenize of investment funds, aiming for a global leadership position after criticism of its crypto asset policy.
As global financial centers race to establish a legal framework for digital assets, the UK has made an important move to assert its position in the field of blockchain technology. The UK Financial Conduct Authority (FCA) has just announced a detailed roadmap to allow asset management companies to apply blockchain technology to Tokenize investment funds, marking a turning point in the country's digital asset regulation policy.
The initiative is not only aimed at providing legal clarity to businesses but also promoting innovation and growth in the asset management industry, according to an announcement made on Tuesday.
Simon Walls, FCA’s Chief Markets Officer, stressed that Tokenize has the potential to create fundamental changes that will benefit both the industry and investors. He asserted that many activities can be implemented within the existing regulatory framework, while the proposed changes will open up new possibilities.
Benefits and specific implementation plan
The FCA believes that Tokenize products can increase competition, reduce operating costs and expand access to investment, particularly in private and infrastructure markets. Digitizing fund operations allows asset managers to significantly reduce reconciliation and data Chia costs, thereby improving overall efficiency.
The detailed roadmap includes guidance on operating a crypto fund register through the “UK Blueprint” model, a simplified transaction processing framework for both traditional and crypto fund units. The FCA also proposed a roadmap for developing a blockchain-based payment mechanism and pledged to review how the regulatory framework needs to evolve as the technology becomes more widespread. Walls stressed the ambition to make the UK a global leader in the field.
The FCA’s move follows a wave of industry criticism of the UK’s crypto-asset policy. In June, analysts from the Official Monetary and Financial Institutions Forum (OMFIF) warned that the UK had “lost its early advantage” in the field of finance based on Distributed Ledger technology. Coinbase, a major crypto-asset exchange, even released a video satirizing the UK financial system and calling for a strategy friendly to blockchain innovation.
The industry pressure appears to be paying off. Last week, the FCA lifted its 2019 ban on crypto exchange-traded notes (ETNs) for retail investors. The Bank of England is also reportedly easing limits on corporate stablecoin holdings, XEM exemptions for companies that need to maintain large fiat reserves.
