UK Finance warns Britain's £290bn financial services industry risks being governed by overseas infrastructure as tokenisation race accelerates
Banking industry body UK Finance, in a joint report with management consultancy Oliver Wyman, has warned that the UK's £290bn financial services industry could end up operating on infrastructure designed, governed, and priced by foreign competitors if the government fails to move quickly on tokenisation (the process of converting traditional financial assets such as government bonds and cash into digital tokens that can be traded and tracked in real time using automated smart code). The report argues the ecosystem will form globally regardless of UK action, and that if it anchors in New York, Frankfurt, or Singapore, British financial services will become a rule-taker rather than a rule-setter. UK Finance chairman Bob Wigley warned in a public statement that the challenge is now one of execution rather than concept. The body is urging policymakers to publish a single national plan covering both tokenised assets and digital money on connected systems, positioning the UK as a setter of global standards for digital finance. It is also calling for the Wholesale Digital Markets Champion, Chris Woolard, to be given formal decision-making powers and milestone mandates, beyond the advisory and coordination role he currently holds. The report follows last month's government decision to hand the Bank of England a new secondary objective on payments innovation, requiring it to report annually on digital finance developments. That move reportedly followed frustration from the Treasury that progress on digital finance was too slow. Lloyds and Barclays had earlier this year joined calls to accelerate the digitalisation of UK markets.
Why this matters
Tokenisation of capital markets infrastructure is not a distant horizon: other jurisdictions are actively building the settlement and trading rails that will define global finance for decades, and first-mover advantage in setting interoperability standards is substantial. The UK's risk is not merely competitive but structural: if clearing, settlement and collateral management migrate to foreign-governed token platforms, UK regulators lose oversight leverage and UK firms face higher costs to access those systems. The call to give Chris Woolard formal authority reflects a broader tension between the Bank of England's historically cautious approach to payments innovation and the government's pro-growth agenda, a tension now formally embedded in the Bank's new secondary objective. For City firms, the pace of tokenisation will determine how quickly wholesale finance workflows, from bond issuance to repo and securities lending, are restructured.
On the Ground
This story generates work across financial regulation, capital markets, and technology transactions practices. Regulatory lawyers will be advising banks and asset managers on the evolving UK framework for digital assets and digital money, including any new licensing or compliance obligations that flow from a national tokenisation plan. Capital markets teams will be tracking how tokenised bond issuance and digital settlement affect prospectus requirements and listing rules. Banking and finance teams will need to review how tokenisation interacts with existing facility agreement and security documentation. A trainee working in this space would assist with regulatory filing coordination, draft compliance gap analysis memos comparing UK and EU approaches to digital asset frameworks, and help prepare due diligence questionnaires for technology vendors supplying tokenisation infrastructure.
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“What legal and regulatory changes would the UK need to implement to position itself as the leading global hub for tokenised financial markets, and what are the main risks if it fails to act?”
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