The UK's financial services industry, valued at £290bn, is at risk of being governed overseas due to its slow progress in digital asset innovation, according to a new report.
Banking industry body UK Finance, in a joint report with management consultancy Oliver Wyman, has urged policymakers to accelerate the development of infrastructure for tokenisation. The report warns that if the digital asset ecosystem anchors in other financial hubs like New York, Frankfurt, or Singapore, the UK industry will operate on infrastructure designed, governed, and priced elsewhere.
Tokenisation involves converting traditional financial assets, such as government bonds and cash, into digital tokens that can be traded and tracked in real-time. UK Finance stated that the UK has been slower to act than some competitors, risking falling further behind.
The report calls for UK policymakers to publish a single national plan for tokenised assets and digital money to be traded on connected systems. This aims to position the UK as a setter of global standards for digital finance. UK Finance chairman Bob Wigley noted the risk of adapting to standards set elsewhere rather than shaping them.
Ministers last month gave the Bank of England a new secondary objective on payments innovation, requiring annual reports on its digital finance developments. Industry leaders reportedly told City AM that this objective followed Treasury frustration over the slow progress of digital finance innovation plans.