The UK’s Financial Conduct Authority (FCA) is engaged in crafting a blueprint for fund tokenization, as revealed by FCA Chair Ashley Alder in a speech on Thursday.
Collaborating with the Technology Working Group, this initiative aims to outline a framework for the digitization of funds using distributed ledger technology.
“Finally, on innovation, the discussion paper touched on how fund managers might adopt distributed ledger technology to offer fully digitised funds to the public. Since then, we’ve been working with the Technology Working Group, which sits under the Treasury’s Asset Management Taskforce, on a blueprint for fund tokenisation. The working group will publish this later in the year,” Alder stated in the drafted speech.
The FCA had previously published a discussion paper in February, addressing potential enhancements to the asset management regime and exploring the adoption of blockchain for fully digitized funds.
The forthcoming blueprint, developed in conjunction with the Technology Working Group under the Treasury’s Asset Management Taskforce, is anticipated to be unveiled later this year.
“Many firms see use cases for distributed ledger technology (DLT), even if direct marketing of tokens may be some time off. So, we’ve already held a tech-sprint with the industry to test policy initiatives and the rule changes needed to support work on fund tokenization,” Alder added.
This move underscores the FCA’s commitment to staying at the forefront of financial innovation and adapting regulatory frameworks to the evolving landscape of digital assets.
