Financial regulators team up to explore uses of tokenisation

Financial regulators, including the UK’s Financial Conduct Authority (FCA), have joined forces to drive digital innovation.

The FCA has partnered with the Monetary Authority of Singapore, the Financial Services Agency of Japan and the Swiss Financial Market Supervisory Authority to explore the uses of fund and asset tokenisation as well as decentralised finance.

The initiative, called Project Guardian, is to examine the benefits and regulatory challenges of tokenisation.

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“We are pleased to join Project Guardian. The UK’s asset management sector – which is the second largest in the world – sees significant potential in the use of distributed ledger technology to drive innovations, efficiencies, and enhanced value for customers,” said Sarah Pritchard, executive director of markets and international at FCA.

“We look forward to working with our global partners to examine the market benefits, regulatory challenges, and industry use cases of asset and fund tokenisation.”

Through the partnership, the regulators are aiming to develop common standards and frameworks to support the growth of the digital asset ecosystem.

Tokenisation has become an area of focus for regulators in recent years as more and more asset managers explore the technology to bring private assets, like private credit, to retail investors.

Several fund managers in Europe and Asia already offer tokenised access to their funds.

Just last week, Fasanara Capital partnered with fintech companies Sygnum and Float to tokenise private debt investments.

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