The United Kingdom’s Financial Conduct Authority (FCA) has introduced a comprehensive roadmap designed to help asset managers integrate blockchain technology into their operations through fund tokenization. The move is part of the regulator’s ongoing efforts to promote innovation within the financial sector while ensuring compliance with existing rules.
In its recent announcement, the FCA stated that the initiative seeks to offer greater clarity for firms exploring tokenization and to encourage broader adoption of blockchain-based financial products. The regulator emphasized that tokenization could play a transformative role in reshaping asset management, with potential advantages for both industry participants and consumers.
Simon Walls, the FCA’s Executive Director of Markets, indicated that the regulator recognizes tokenization as a powerful tool for driving modernization across the asset management landscape. He suggested that firms already have considerable flexibility under current rules to experiment with tokenization and that further regulatory enhancements are being planned to expand those opportunities.
Tokenization to Reshape Asset Management
According to the FCA’s assessment, tokenized financial products could increase competition, reduce operational costs, and widen access to investment opportunities—particularly in private markets and infrastructure projects. By digitizing fund operations, asset managers could streamline reconciliation processes, reduce data-sharing expenses, and improve overall transparency.
The roadmap outlines key measures for introducing tokenized funds within the existing regulatory environment. It includes guidance for operating tokenized fund registers under the UK’s Blueprint model, a simplified dealing structure for processing both traditional and blockchain-based fund units, and a proposed roadmap for implementing blockchain-based settlement systems. These elements are expected to provide a foundation for integrating distributed ledger technology into mainstream asset management practices.
Walls noted that the UK has an opportunity to establish itself as a global leader in fund tokenization by providing firms with the regulatory clarity needed to innovate confidently. The FCA also plans to monitor how regulation should evolve as tokenization becomes more widely adopted, ensuring that new frameworks remain both secure and innovation-friendly.
Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers.
We want to provide asset managers with the clarity and confidence they need to deliver.https://t.co/J4UI4oVfAR#FCAGrowth #FinancialRegulation
— Financial Conduct Authority (@TheFCA) October 14, 2025
Growing Industry Pressure and Regulatory Response
The FCA’s roadmap follows mounting pressure from the blockchain and crypto industries calling for more progressive regulation in the UK. In September, Coinbase encouraged its user base to sign a public petition urging the government to adopt a pro-innovation blockchain strategy. The petition advocated for a formal regulatory framework covering stablecoins and tokenization, broader blockchain adoption across sectors, and the appointment of a dedicated blockchain policy leader.
Industry analysts have previously criticized the UK for falling behind in the global race for blockchain leadership. A June report from the Official Monetary and Financial Institutions Forum (OMFIF) argued that Britain had failed to maintain its early advantage in distributed ledger finance due to regulatory inertia.
Coinbase echoed this criticism in July with a satirical video titled “Everything is Fine,” which humorously highlighted economic struggles such as inflation and poverty, while contrasting them with claims of strong financial stability.
Signs of Regulatory Flexibility Emerging
Recent policy shifts indicate that regulators may be responding to industry feedback. The FCA recently revoked its 2019 ban on crypto exchange-traded notes (ETNs) for retail investors, allowing trading on FCA-approved UK exchanges. Additionally, the Bank of England is reportedly considering easing proposed limits on corporate stablecoin holdings, including possible exemptions for firms requiring substantial fiat-backed reserves.
Together, these developments signal a broader regulatory shift toward embracing blockchain innovation while maintaining robust oversight. The FCA’s roadmap for tokenized funds positions the UK to reclaim momentum in the global digital finance landscape, offering a more balanced framework that encourages both innovation and investor protection.
