The UK is promoting a box revolution through tokenization

Important points:

  • UK Tokenization Fund Roadmap: Investors with billions in assets launch plan for tokenization funds.
  • Tokenized Money Vs. Cryptoassets: A clear distinction between tokenized money and other digital assets such as cryptocurrencies and non-fungible tokens (NFTs).
  • UK Government Support: The UK Financial Conduct Authority (FCA) supports the new approach to funding tokenization.

Investors representing trillions of dollars in assets have deployed an innovative scheme to tokenize funds, an initiative that has received approval from the UK government. The leading group in this effort is the Investment Association, which manages more than 11 trillion in assets.

Implementing token funds: a change in capital markets

The Investment Association has outlined its plans to implement tokenized funds. These funds, whose shares are digitized and traded on blockchain platforms, represent significant progress towards interacting with increasingly digital capital markets, using distributed ledger technology (DLT).

Distinguish between tokenized money and other digital assets

According to the Investment Association, tokenization is clearly distinct from other digital assets, such as crypto tokens and non-fungible tokens (NFTs). This project focuses on leveraging technology to tokenize money, different from investing in cryptocurrencies or NFTs. The goal is to use the underlying technology and concept of tokenization in a way that differs from exposure to unsupported crypto assets.

Support from the UK Financial Authority

Sarah Pritchard, CEO of the UK Financial Conduct Authority (FCA), expressed her support for the report on tokenization of funds. This report is considered the first phase of a pioneering effort to highlight the benefits of technological innovation in asset management.

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The Roadmap to Tokenization represents a significant evolution in the use of blockchain technology in traditional finance, decoupling the concept of tokenization from the more volatile aspects of digital assets such as cryptocurrencies. This initiative reflects a cautious but innovative approach to the adoption of blockchain technology in the investment sector.

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