We have partnered with Hogan Lovells to produce a new report, ‘The digitalisation of UK capital markets: digitalised financial market infrastructure and tokenised bonds’.
This report addresses the urgent need for the UK to press ahead with the digital transformation of its capital markets. This is fundamental to the long term international competitiveness of the UK as an international financial centre, and to its capital markets vital enabling role of supplying the capital needed to drive investment and sustainable growth, underpinning the jobs, pensions, investments and savings of UK citizens.
It focuses on the significant opportunities that distributed ledger technology (DLT) and the tokenisation of securities present to the digitalisation of the UK’s financial market infrastructure (FMI) and the bond market: two critical aspects of this transformation.
Given the fundamental role of FMIs to the overall financial industry, rapid digitalisation would offer huge potential to unlock the growth of capital markets and the wider economy. While the UK has taken positive steps to encourage a regulatory environment that supports financial markets digitalisation, and momentum is building for tokenisation, it is lagging behind markets such as France, Germany, Luxembourg, Hong Kong and Singapore when it comes to digital bond issuance. The jurisdictions that lead this global transformation are expected to attract greater investment into their economies.
The report sets out concrete actions for the government, regulators and industry to take forward in the near and medium term to maintain the UK’s status as a world-leading international financial centre and support the government’s growth mission.