UK Financial Conduct Authority Officially Backs Tokenization With New Regulatory Framework

Core Viewpoint - The UK's Financial Conduct Authority (FCA) is officially supporting tokenization efforts and plans to provide regulatory guidance to facilitate adoption [1][2]. Regulatory Clarity and The Path Forward - The FCA is proposing changes to existing rules to benefit businesses involved in tokenization, aiming to position the UK as a leader in this space [2]. - Proposed measures include clarifying tokenized fund registers, offering a streamlined model for fund managers, and developing a roadmap to advance fund tokenization while addressing barriers like public blockchain usage [2]. - The consultation period for these proposals ends on November 21, with discussions concluding on December 12 [2]. Global Context of Tokenization - The UK's initiative aligns with a global increase in tokenization services and regulatory activities, indicating a broader trend in the financial landscape [3]. - Notable developments include Binance's launch of a principal-protected yield product tracking real-world assets, including tokenized US Treasury bills [3]. - Traditional financial institutions, such as Goldman Sachs and Bank of New York Mellon, are also engaging in tokenization, offering mirrored services for money market fund investments [4].