FCA tokenization guidance clarifies how UK asset managers can adopt tokenized funds under existing rules and proposes a roadmap for fund tokenization, aiming to lower costs, improve settlement efficiency, and support innovation across around 2,600 asset managers in the UK.
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FCA proposes clear guidance for tokenized fund registers and an alternative dealing model
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The plan targets efficiency gains, lower reconciliation costs, and broader consumer access to personalized investments
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UK has ~2,600 asset managers managing roughly 14 million euros in assets; regulator collaboration includes MAS, FSA (Japan), and FINMA
FCA tokenization guidance: key steps to adopt tokenized funds, clarity for asset managers, and a roadmap for innovation—read the summary and next steps.
By COINOTAG • Published: October 14, 2025 • Updated: October 14, 2025
What is FCA tokenization guidance?
FCA tokenization guidance is a set of proposals and clarifications from the UK Financial Conduct Authority aimed at helping asset managers adopt tokenized fund models within existing regulatory frameworks. The guidance focuses on operating tokenized fund registers, alternative dealing models, and addressing settlement and public blockchain considerations to support innovation while protecting investors.
How will the FCA support asset managers adopting tokenization?
The FCA plans to provide formal clarity on using tokenized fund registers under the UK Blueprint model and to propose a streamlined dealing model for authorized funds, whether traditional or tokenized. The regulator highlights potential savings from reduced reconciliation and improved data sharing between firms. The proposal also sets out a roadmap to address barriers such as on-chain settlement and the use of public blockchains, and signals collaboration with international counterparts including the Monetary Authority of Singapore (MAS), the Financial Services Agency of Japan (FSA), and the Swiss Financial Market Supervisory Authority (FINMA).
Frequently Asked Questions
How does the FCA’s proposal affect fund operations and costs?
The FCA’s proposal could lower fund management costs by streamlining data reconciliation and settlement processes. By enabling tokenized registers and alternate dealing models, asset managers may reduce administrative overhead and speed up transfers, potentially passing savings to consumers through lower fees and more tailored investment options.
Can consumers access tokenized funds under the new guidance?
Yes. The FCA emphasizes consumer access to more cost-effective and personalized investment products via tokenization, while retaining investor protections under existing rules. The guidance is designed to give firms the confidence to deploy tokenized products in a regulated environment.
Key Takeaways
- Regulatory clarity: FCA proposals give asset managers a clearer path to operate tokenized fund registers within current rules.
- Efficiency gains: Tokenization targets reduced reconciliation costs, faster settlement, and improved interoperability between market participants.
- Industry collaboration: The FCA is coordinating with international regulators (MAS, FSA, FINMA) and UK banks running pilots to align approaches and ensure safe market development.
Conclusion
The FCA tokenization guidance represents a pragmatic step toward mainstreaming tokenized funds in the UK financial system. By clarifying how tokenized registers and alternative dealing models can operate under existing rules, the FCA aims to support roughly 2,600 asset managers in delivering more efficient and personalized investment solutions. COINOTAG will continue to monitor regulator updates and industry pilots as the UK seeks to balance innovation with investor protection—expect further technical consultations and pilot results through mid-2026.
Background and context
The FCA highlighted that Britain hosts approximately 2,600 asset management firms managing around 14 million euros of assets for UK and global clients. The regulator framed tokenization as a key element of its strategy to support innovation, noting opportunities to improve operational efficiency and reduce fund management costs. The FCA’s report also discusses how tokenization could change data sharing, reconciliation and settlement practices across the industry.
Official statements and expert commentary
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. #FCAGrowth #FinancialRegulation
— Financial Conduct Authority (@TheFCA) October 14, 2025
“Tokenization has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers. There are many things that firms can do under our existing rules and more that become possible with the changes we propose enacting now.”
– Simon Walls, Executive Director of Markets at the FCA
The Bank of England Governor Andrew Bailey recently emphasized tokenization’s role in the UK’s digital finance strategy, distinguishing tokenization from stablecoins by stressing that tokenized deposits can remain within the regulated banking system. Several major UK banks, including HSBC, NatWest, and Lloyds, have launched pilot programs for tokenized deposits aimed at marketplace payments and potential mortgage-refinancing applications; those pilots are scheduled to continue into mid-2026. Manish Kohli, HSBC’s global head of payments solutions, described the initiative as a move toward interoperability of tokenized deposits across banks. William Lee, an analyst at UK Finance, noted that tokenized deposits may encourage wider institutional participation in digital asset infrastructure.
COINOTAG notes that the FCA’s approach is deliberately measured: it proposes using the UK Blueprint as a foundation for operational guidance and is exploring an alternative dealing model to allow on-chain or token-based settlement where appropriate. The regulator has also set out to consult further with industry participants to refine technical and policy details.
Next steps for asset managers
- Review existing operations: Assess current fund register and dealing processes for tokenization readiness.
- Engage in consultations: Participate in FCA and industry consultations to shape operational standards and safeguards.
- Monitor pilots: Track UK bank and industry pilots through mid-2026 for interoperability insights and risk management practices.
Sources and further reading (plain text)
Financial Conduct Authority report (October 14, 2025); Bank of England statements; Monetary Authority of Singapore (MAS); Financial Services Agency (Japan, FSA); Swiss Financial Market Supervisory Authority (FINMA); statements from HSBC, NatWest, Lloyds; commentary from UK Finance and Cryptopolitan (news coverage).
