The UK Finance group represents more than 300 institutions, including major banks Barclays, Santander, Citi and HSBC, as well as financial technology leaders Revolut and Monzo. <br
Bob Wigley, chairman of UK Finance, said the study, conducted in conjunction with the consulting firm Oliver Wyman. In consultation with market participants and regulators, it emerged that tokenization of financial instruments could attract billions of pounds to the British economy.
UK Finance said tokenization of securities would reduce transaction costs, provide instant settlement and payments, reduce counterparty risk through programmable smart contracts, and ensure data immutability on the blockchain. But without further decisive action on fintech, the U.K. risks falling behind other jurisdictions. So the government should put the tokenization of markets at the top of its agenda, Wigley urges.
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“It’s hard to determine how much tokenization will cost, estimates remain conflicting. But everyone in the study agrees that asset tokenization has the potential to transform the financial market and increase access to it,” UK Finance said.
The company also cited a Citi study that said the number of tokenized securities outstanding could reach $5 trillion by the end of the decade. UK Finance recently proposed that the Bank of England limit the holding of the digital pound for private users to £5,000 in order to avoid an outflow of money from commercial banks.