On 25 November 2024, HM Treasury published a keynote address by a government minister at the Tokenisation Summit, outlining the UK Government’s ambitious plans to position the nation as a global leader in tokenisation and digital asset innovation. The speech underscored the government’s commitment to embracing emerging and disruptive technologies, which are anticipated to transform the financial services landscape.
Key Highlights from the Address
1. Digital Gilt Issuance and Sandbox Innovation
The UK Government plans to issue a digital gilt instrument, referred to as ‘DIGIT,’ through the Digital Securities Sandbox launched in September 2024. This initiative allows firms to experiment with distributed ledger technology (DLT) within a live, monitored environment, facilitating innovation in capital markets. The DIGIT pilot will enable the government to explore the benefits of DLT in debt issuance processes, further driving the development of DLT platforms and infrastructures.
2. Comprehensive Regulation of Cryptoassets
Building on the October 2023 proposals, the government intends to fully implement a new regulatory framework for cryptoassets. This will include introducing regulated activities for:
- Operating cryptoasset trading platforms.
- Admissions to trading and market abuse regimes.
- Issuance of stablecoins, aligning with recommendations from international bodies like the Financial Stability Board.
Notably, while stablecoins will be regulated under the new framework, they will not yet be integrated into UK payments regulation to avoid disproportionate burdens on the evolving market.
3. Clarity for Cryptoasset Staking Services
The government has committed to removing legal uncertainties around cryptoasset staking services, confirming that they will not constitute a Collective Investment Scheme under financial services law.This move aims to foster innovation while managing risks within the broader cryptoasset regulatory framework.
A Vision for the Future
The keynote highlighted the government’s broader ambition to integrate traditional finance and cryptoassets, fostering mutual growth and innovation. By leveraging initiatives like the Digital Assets Bill and the Digital Securities Sandbox, the UK aims to:
- Stimulate innovation in securities tokenisation.
- Create a regulatory environment that balances certainty with flexibility.
- Ensure the UK remains a hub for financial innovation and growth.
As the government continues to consult on draft legal provisions for the cryptoasset regime in 2025, industry collaboration will remain central to shaping this dynamic sector.
For further insights, read the full keynote address here
For any queries regarding tokenisation, cryptoasset regulation, or compliance with the UK’s evolving digital asset framework, please contact us.
