The £33 billion annual boost to the UK economy touted by Barclays and Lloyds Banking Group's digitalisation drive may seem like an ambitious claim, but data from their report shows it's not just a pipe dream. A 54-member taskforce has outlined a roadmap for widespread adoption of tokenisation, which represents asset ownership digitally on a blockchain – a decentralised network for data storage. If the UK can keep pace with global leaders like the US and emerging players in the UAE, Singapore, and Hong Kong, this market could reach an estimated $88 trillion by 2035, generating £33 billion in economic output and £14 billion in tax revenues.
The report's author, Chris Woolward, has outlined a clear strategy across nine key areas to leverage tokenisation technology. This includes streamlining regulatory frameworks for digital assets, which have been a contentious issue – the Bank of England recently finalised its stablecoin rules after facing criticism for being too prescriptive. The central bank's framework abandoned plans for limits on customer deposits, opting instead for a temporary cap on sterling-denominated tokens in circulation.
However, UK Finance and Markets must move swiftly to capitalise on this opportunity. International competition is fierce, with the US dominating digital markets and other nations rapidly gaining ground. Miles Celic, chief executive of TheCityUK, urged policymakers to be 'much faster, more ambitious, and more creative' in their approach – failure to do so risks jeopardising the UK's status as a leading global financial services hub.
The report highlights the significant potential for tokenisation to enhance efficiency, foster innovation, and drive growth. Proponents argue that trading assets as tokens would dramatically increase transaction speed and reduce administrative overheads by replacing traditional market infrastructure with automated software – a proposition supported by data from Barclays and PwC estimates.