UK funds given approval to begin tokenisation efforts
Funds can now implement a baseline approach to tokenisation, providing they meet certain characteristics, such as comprising of mainstream investment assets and still providing valuations and settlement through the same processes and timeframes.
The group, which was established earlier this year, has today (24 November) published a roadmap for the adoption of distributed ledger technology through fund tokenisation.
The report, UK Fund Tokenisation — A Blueprint for Implementation, outlined a baseline model for the implementation of tokenisation that can be used within the existing legal and regulatory framework.
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This means funds can now implement a baseline approach to tokenisation, providing they meet certain characteristics. These include funds being comprised of mainstream investment assets, while still providing valuations and settlement through the same processes and timeframes.
In the new model, tokenised funds will be «highly recognisable and consistent with mainstream funds that exist today», the report said, while utilising distributed ledger technology (DLT) for sales and redemption transactions and acting as the register of holders.
Adam Belding, CTO of Calastone, argued that DLT was a «powerful platform for providing, managing, securing and distributing tokenised assets», adding that he believed it will «unlock meaningful improvements in operational efficiency and product innovation in the funds industry».
«To truly transform the process of investing, the industry needs to think about tokenisation not as a new technology, but as a transformative tool to create a frictionless digital marketplace for asset management,» he
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