The United Kingdom’s Financial Conduct Authority (FCA) has revealed its plans to craft a blueprint for fund tokenization. They announced in their Thursday speech that the blueprint will be made in collaboration with the Technology Working Group.
We’ve been working with the Technology Working Group on a blueprint for fund tokenization, which will be published later this year
FCA Chair Ashley Alder highlighted the agency’s progressive stance.
What is fund tokenization ?
Fund tokenization is issuing digital tokens that represent investment funds using distributed ledger technology (blockchain). The FCA has been actively engaging with trade associations and industry firms to explore the potential of distributed ledger technology for fully digitized funds.
The FCA published a discussion paper in February aimed at updating and enhancing the regulatory framework for asset management. Alder noted that the paper addressed how fund managers could harness blockchain technology to offer digitized investment opportunities. It will reflect their forward-looking approach to financial innovation.
UK balances Crypto regulation
Just days before, a UK regulator expressed its concerns regarding the promotion of fan tokens in professional sports. UK’s Culture, Media, and Sports Committee has raised concerns about the financial damage to supporters due to the price volatility of these tokens.
They said that it has the potential damage to club reputations. The committee is urging the UK government to tighten regulations governing the promotion of NFT projects to address growing concerns of fraud.
The cryptocurrency landscape in the UK is evolving rapidly, with regulators actively seeking ways to embrace innovation while safeguarding investors and fans alike. Formulation of crypto regulation in the UK reflects the balancing act between embracing innovation and protecting the interests of investors.
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