UK Treasury launches tokenisation push with 54 firms led by Chris Woolard

A coalition of 54 prominent financial companies, backed by the City of London Corporation, has started a year-long effort to establish live tokenisation solutions in the UK’s financial markets.

Major institutions join UK tokenisation initiative

The initiative, coordinated by HM Treasury, brings together industry leaders including BlackRock, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, and UBS. The group aims to advance the use of blockchain-based tokenisation, focusing initially on pilot cases such as tokenised repurchase agreements, or repos. This work will explore real-world applications for digital assets within established market mechanisms.

Chris Woolard, serving as HM Treasury’s Wholesale Digital Markets Champion, is leading the project. Woolard previously served eight years as chair of the Financial Conduct Authority, the UK’s primary financial regulatory agency.

Boston Consulting Group has estimated that the global market for tokenised real-world assets (RWAs) could reach $88 trillion by 2035—a figure that would far surpass the current combined value of crypto assets and stablecoins, which stands at approximately $3 trillion.

Other major markets, including the United States and the European Union, are also exploring how to adopt similar tokenisation strategies within their financial systems.

Mini dictionary: Real-world assets (RWAs): Physical or traditional financial assets, such as real estate or government bonds, that are represented and traded as digital tokens on a blockchain. Tokenisation makes these assets more accessible and transferable in digital markets.

Economic impact and competitive landscape

Woolard’s initial report outlines significant benefits from adopting tokenised solutions. The document forecasts a potential increase of £33 billion ($44.2 million) in annual economic output and an additional £14 billion in tax revenue by 2035, should tokenisation become widely adopted in the UK financial sector.

Woolard described tokenised markets as highly competitive and interconnected, cautioning that the UK must match the speed set by agile international participants if it wants to shape the next generation of global financial infrastructure.

“Like all network games, it is a race and one where the UK needs to move at the speed of the most agile players if we want to ensure we have a stake in developing the approach for international markets,” Woolard said.

Challenges in implementing tokenised markets

While the benefits are considerable, key challenges remain. Kirit Bhatia, Chief Digital Assets Officer at Banking Circle, pointed out that seamless funding, settlement, use as collateral, and network interoperability are essential for tokenised assets to function effectively within the existing financial infrastructure.

“Tokenised markets will need payment infrastructure that can support real-time settlement, cross-border movement, multiple forms of regulated money and interoperability between stablecoins, tokenised deposits and existing fiat rails. Without that, digital assets risk becoming faster at the edges but still constrained by the legacy plumbing underneath,” Bhatia explained.

The report further suggests that payment and settlement systems will need significant updates to meet the requirements of digital assets and support real-time, cross-border operations.