In a landmark move, the UK Financial Conduct Authority (FCA) has unveiled plans to let asset managers issue crypto-tokens representing fund shares on public blockchains like Ethereum — a major step toward modernising fund infrastructure and engaging younger investors.
💠 Why It Matters
Until now, tokenisation in the UK was restricted to private chains. Allowing public blockchain use signals a strategic shift to boost the competitiveness of the UK’s £8-trillion asset-management industry — aligning with broader government efforts to position Britain as a global crypto-finance hub.
💬 “Tokenisation has the potential to drive fundamental changes in asset management,” said Simon Walls, FCA Executive Director of Markets.
📊 Key Highlights
- Public blockchain approval: Fund shares could now be issued as crypto tokens on open networks.
- Investor appeal: Nearly half of trading-app users aged 18-34 prefer low-cost, fractional investments — a trend the FCA hopes tokenisation will capture.
- Next frontier: The regulator is also seeking feedback on stablecoin settlements and hinted that direct fund investment in cryptocurrencies may be considered in a future review.
- Industry support: The Investment Association hailed this as a “significant stance change,” likely to spur mainstream adoption.
⚠️ Risks Acknowledged
The FCA cautioned that public chains pose consumer-protection and market-integrity risks, emphasizing that firms must maintain existing regulatory standards even as technology evolves.
💡 Strategic Insight:
This consultation is more than a policy tweak — it’s the foundation for tokenised capital markets where funds, settlement, and investor access converge through blockchain rails. If executed prudently, it could transform the UK into a regulatory model for digital asset integration in traditional finance.