UK tokenisation push targets wholesale markets measured in trillions

The UK’s wholesale financial markets give it a large base from which to develop tokenised assets, with daily foreign-exchange turnover of about $4.7 trillion and roughly half of global interest-rate derivatives activity, according to figures cited by John Bertrand, managing director of Tec 8 Limited. Bertrand said the opportunity will depend less on headline market-size projections than on whether the UK can show that tokenised settlement is legally enforceable, resilient and interoperable at institutional scale.

Tokenisation uses distributed ledger technology to represent assets such as bonds, fund units or other financial claims as digital records. In wholesale markets, the appeal is that trading, compliance controls and settlement can be linked more tightly than in conventional infrastructure, where transactions often move through separate clearing, correspondent banking and reconciliation processes.

Bertrand said DLT-based systems could support longer operating hours, broader investor access and near-real-time settlement. He contrasted that with securities settlement cycles of T+1 to T+2 and cross-border settlement that can take one to three days. In a tokenised delivery-versus-payment process, the asset and cash legs can be exchanged simultaneously, reducing principal risk, subject to the legal and liquidity arrangements in place.

UK market scale

The UK’s starting position is significant because many of the assets under discussion are already concentrated in London. Bertrand cited the BIS Triennial Survey 2025 for the UK’s $4.7 trillion in daily foreign-exchange turnover, equal to about 38% of global activity, and for its roughly 50% share of global interest-rate derivatives turnover.

He also pointed to about £2.5 trillion to £2.7 trillion of gilts outstanding, citing the UK Debt Management Office, and a repo market of about £935 billion, up by about 50% since 2018, citing the Bank of England. The Investment Association’s 2025 figure for UK assets under management was about £14.3 trillion, according to Bertrand.

The Bank of England’s renewed real-time gross settlement system illustrates the infrastructure scale involved. Bertrand cited Bank of England and National Audit Office figures showing a £431 million rebuild cost and about £0.8 trillion of daily throughput.

Policy programme

HM Treasury, the Bank of England and the Financial Conduct Authority are working on the UK’s framework for tokenised markets, Bertrand said. HM Treasury has appointed Chris Woolard CBE as Wholesale Digital Markets Champion, with a report on DLT adoption and interoperability due in 2027.

Bertrand also referred to the Digital Securities Sandbox, the DIGIT pilot and the Bank of England’s synchronisation work as tests of whether tokenised settlement can operate safely. FCA and Bank of England figures cited by Bertrand show 16 firms participating in the DSS.

Global competition

No major financial centre has yet shown a fully scaled production model for tokenised wholesale settlement, Bertrand said. He cited the European Union’s DLT Pilot Regime, live since 2023, the European Central Bank’s Pontes work to connect market DLT platforms to TARGET Services from the second half of 2026, Singapore’s Project Guardian and Hong Kong’s Fintech Supervisory Sandbox as competing programmes.

Forecasts for tokenised real-world assets remain wide. Bertrand said industry estimates suggest tokenised real-world assets grew about fivefold between 2023 and 2025, led by private credit and tokenised money-market funds, while 2030 global market forecasts range from about $2 trillion to $30 trillion across estimates from BCG, McKinsey, Standard Chartered and others.

Bertrand argued that the UK’s advantage is not permanent because other financial centres are also testing market infrastructure. In his view, a staged delivery path, even one extending to 2028 for live central-bank-money settlement, would be more credible for market participants than an ambitious timetable that later slips.

This story draws on original reporting from Finextra Research.