UK Focuses on DLT and Tokenization in Wholesale Finance Strategy

The U.K. government on Tuesday announced its intention to empower the wholesale market to identify optimal applications for distributed ledger technology (DLT) and to implement tokenization solutions.

Key Information

• The U.K. aims to become a prominent crypto hub, actively creating legislation for its cryptocurrency sector.
• The government is exploring innovations in digital wholesale payments, including proposals for tokenized deposits and stablecoins.

Current Developments

The Treasury has released a policy paper outlining these ambitions, which also includes forming cross-market groups to further DLT activities in wholesale financial markets. This comes as U.K. regulators begin to shape a regulatory framework for crypto technologies, indicating significant movement towards reaching those goals.

Global Context

In a wider context, tokenization of real-world assets (RWA) has surged by 380% over the past three years, recently reaching approximately $24 billion, highlighting a robust growing market, per reports from industry leaders.

Ultimately, the U.K. is committed to allowing the financial sector to experiment with tokenization strategies aimed at improving asset digitization and post-trade processes.

Source: CoinDesk