A study for the UK Government Suggests That Businesses Should Introduce Tokenization Plans-min
Press Release

A study for the UK Government Suggests That Businesses Should Introduce Tokenization Plans

Collaborative tokenization initiatives are called for by a working group with technology support from the UK government.

The report further recommends that tokenized assets be managed by funds and on-chain transfers to be made possible.

A technology working group supported by the UK government is encouraging firms to implement tokenization strategies in collaboration with their peers, according to a new report released on Tuesday. Tokenization involves digitizing real-world assets, predominantly through blockchain technology, and financial institutions across the world are exploring tokenization as well as other settlement systems that come along to improve traditional market efficiency.

The focus of the working group is based on feedback from industry stakeholders to emphasize on-chain fund settlements using digital currency. It also said that funds should be able to hold tokenized assets and utilize public permissioned networks accessible by verified users of blockchain. The group includes the Financial Conduct Authority and HM Treasury which oversee cryptocurrency regulation in the UK’s financial sector.

Following on from a previous report in November calling for regulators to clarify their stance on tokenization due to rising interest among companies, this new report suggests that “tokenizing money market fund units used as collateral could speed up relevant settlement processes, creating opportunities for this use case”. Meanwhile, it further adds that the government plans to continue interacting with businesses over the potential benefits associated with embedding distributed ledger technology into sovereign bonds.

The report highlights how important the collaborative execution of tokenization strategies by companies has become, pointing out that recognition for traditional finance markets’ simplification via its inclusion is expanding.

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