The UK is taking another step towards modernising its capital markets. Sarah Pritchard, deputy chief executive of the Financial Conduct Authority (FCA), confirmed yesterday that the regulator and the Bank of England will publish a joint tokenisation roadmap in November.
The announcement comes as regulators seek to accelerate the shift towards digital market infrastructure. Pritchard also warned that the FCA will take action against firms that fail to prepare for the UK's move to T+1 settlement in October 2027.
Industry leaders have welcomed the announcement, saying the roadmap must address the operational weaknesses and market fragmentation that are holding back capital markets in the UK and Europe.
Closing the gap between ambition and operational reality
Richard Baker, CEO and founder of Tokenovate and a member of HM Treasury's Wholesale Digital Markets Industry Taskforce, said the roadmap offers a chance to tackle fundamental weaknesses in UK capital markets.
"As we move towards digital market infrastructure, the priority must be making the entire post-trade lifecycle programmable, from standardised data and contractual obligations through to the final movement of cash and assets," he said. "This provides firms with a practical route towards continuous settlement, where capital can be mobilised when it is needed rather than sitting idle between transactions."
Baker added that the T+1 deadline, now less than a year away, makes the transition increasingly urgent. "The gap between market ambition and operational reality must be closed," he said. "Firms can no longer afford to rely on manual processes and fragmented systems to manage increasingly compressed settlement windows. Every reconciliation delay and operational hand-off becomes a greater source of risk when there is less time to put things right."
Europe urged to keep pace
Marius Jurgilas, CEO of Axiology, said Europe should treat the FCA's forthcoming roadmap as a reason to keep up the pace. A former central banker at the Bank of England, the European Central Bank (ECB) and Norges Bank, Jurgilas leads a firm that is participating in the Eurosystem's Pontes initiative.
"The Eurosystem is already ahead: since September, Pontes has allowed DLT platforms to settle in central bank money," he said. "Even so, in most of the market securities and cash still move through separate processes, creating layers of reconciliation, operational complexity and unnecessary costs."
He said tokenisation could allow the architecture to be rethought, enabling more automated settlement and reducing operational friction. The ECB, he suggested, could play an even more significant role by making wholesale central bank money far more accessible to tokenised markets across Europe.
However, he cautioned that Europe's fragmented legal, clearing and settlement landscape continues to make cross-border investment complex and expensive.
"Greater regulatory coordination and more connected infrastructure could help remove these barriers, free up capital and make European markets more competitive," he said.
The joint roadmap from the FCA and the Bank of England is due to be published in November.
