In its second report focussing on fund tokenisation, the Technology Working Group concludes that firms can pursue tokenisation in the UK using a baseline model introduced in the previous report as guidance. The group addresses responses to and developments since the first phase, explores additional use cases, and outlines the next steps for fund tokenisation.

Operating under the UK’s Economic Secretary to the Treasury’s Asset Management Taskforce, the Technology Working Group has released its second report, titled “Further Fund Tokenisation: Achieving Investment Fund 3.0 Through Collaboration”. It builds on the publication of the Group’s first report in November 2023 and delves into fund tokenisation, examining developments and feedback since the baseline model was introduced. This model, compliant with regulations, aims to enhance efficiencies within the digital capital market.


The conclusion of the report emphasises that firms in the UK can adopt the baseline model for fund tokenisation. A key use case identified is the establishment of fully on-chain investment markets with tokenised funds investing in tokenised securities such as in fixed income or other asset classes. Another use case is putting up tokenised money market fund (MMF) units as collateral where eligible under the UK regime for non-centrally cleared derivative contracts. To help develop further momentum in the UK market, firms are set to test these two use cases with support from UK authorities through appropriate channels, such as sandboxes. Parties are invited to express their interest by email before 26 April.

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Third report

For the next phase, the group plans to focus on how the UK’s investment management sector can leverage opportunities presented by AI while the Investment Association will continue separate work on tokenisation.