UK Government-Backed Technology Group Encourages Tokenization Collaboration Among Firms
A new report released on Tuesday outlines the recommendations of a technology working group supported by the UK government, which encourages companies to adopt tokenization strategies in collaboration with their industry peers.
The United Kingdom’s financial regulator has endorsed a blueprint model designed to facilitate the tokenization of funds for asset management firms.
On Tuesday, the group released a new report that expands the group’s previous recommendations from November, which called for regulatory clarity regarding tokenization as companies increasingly show interest in this technology. The report “FURTHER FUND TOKENIZATION: ACHIEVING INVESTMENT FUND 3.0 THROUGH COLLABORATION,” outlines a 30-page comprehensive baseline model to enhance delivery efficiencies and enable effective interaction with digital capital markets and future investors.
The new report highlights the potential benefits of tokenizing units of money market funds used as collateral, which could expedite settlement processes and create new opportunities for this application.
According to feedback from industry stakeholders, the working group emphasizes the importance of on-chain fund settlement using digital currency. They advocate for funds to hold tokenized assets and utilize public permissioned networks, allowing verified users access to the blockchain.
The report highlights two critical use cases for fund tokenization aimed at fostering momentum in the UK market. Firstly, it identifies fully on-chain investment markets, where tokenized funds invest in tokenized securities across various asset classes. Secondly, it suggests using tokenized money market fund units as collateral, subject to eligibility under UK regulations for
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