The UK government has recruited 54 financial firms, including BlackRock, Goldman Sachs, JPMorgan and Morgan Stanley, into a taskforce focused on tokenizing financial markets. According to the project team's estimate, tokenization could add up to 33 billion pounds, roughly $44 billion, in annual output to the UK economy by 2035.
The initiative is led by Chris Woolard, who spent eight years chairing the Financial Conduct Authority (FCA) and now serves as the Treasury's Wholesale Digital Markets Champion. His team's first report lays out a twelve-month action plan and calls for the UK to issue its first tokenized government bond, known as a digital gilt, by the end of the first quarter of 2027.
Who Is at the Table
The group is backed by the City of London Corporation, the local governing body of London's financial district. Besides BlackRock, Goldman Sachs, JPMorgan and Morgan Stanley, the participant list includes HSBC and UBS. More than 50 financial institutions are on the list, spanning banks, asset managers and infrastructure providers.
Over the next twelve months, the firms will test tokenization in live market conditions rather than isolated pilots, which is how most previous attempts played out. The first focus area is tokenized repo, a transaction where securities are used as collateral for short-term cash borrowing. The repo market is one of the largest corners of wholesale finance: banks hand each other securities as collateral every day just to raise short-term cash. If tokenization can make that exact process faster and cheaper, banks will feel the benefit right away rather than years down the line. This is only the first of two planned reports from Woolard's team, with the second one focused on the technical details of implementation and due out later.
Tokenization Could Add $44 Billion a Year to the UK
The forecast rests on expected productivity gains and lower settlement and clearing costs. London, one of the world's leading trading centers, stands to gain the most if it becomes one of the leaders of the shift toward tokenized markets. Losing that position would be just as easy as winning it.
"Like all network games, it is a race, and the UK needs to move at the speed of the most agile players if we want a stake in shaping the approach for international markets."
- Chris Woolard, Wholesale Digital Markets Champion, from the HM Treasury report, July 13, 2026
The report is addressed to the UK's next chancellor. Who exactly will replace Rachel Reeves was still undecided at the time of publication, so part of the recommendations depend on the political will of the Treasury's incoming leadership.
A Tokenized Government Bond by 2027
The roadmap's key milestone will be issuing the UK's first tokenized government bond, a digital gilt, by the end of the first quarter of 2027. The project's goal is to push the market beyond isolated experiments and into territory where tokenized assets are actually traded, settled and used as collateral.
The digital gilt itself didn't come out of nowhere. The government first announced the Digital Gilt Instrument pilot back in November 2024, then updated its plans for onchain settlement, over-the-counter trading and secondary-market development in the summer of 2025. In February 2026, HSBC's Orion platform was named the pilot's technical backbone. The new report adds a concrete timetable to that history and pushes further, calling for subsequent tokenized-bond issuances, live secondary-market trading, and getting the Bank of England to accept digital gilts as collateral in liquidity operations.
The report states plainly that tokenized securities have limited value unless they can be traded or used to raise cash. Some of the payment infrastructure for that already exists. London-based Fnality has been building a sterling-denominated payment system tied to central bank reserves since December 2023, supporting real-time settlement for repo deals and tokenized securities.
The report frames this as a shift "from pilots to scale" and "from ambition to action." The ambition is genuinely high. A tokenized bond, repo deals and further integration with existing payment infrastructure are all meant to launch in parallel rather than one after another, unlike most government projects of this scale.
Global Tokenization Could Reach $88 Trillion
The UK is not the only country racing to stake a claim here. Boston Consulting Group estimates the tokenized real-world asset (RWA) market could reach $88 trillion by 2035. For comparison, the entire current crypto and stablecoin market, including assets like Bitcoin and USDT, is valued at roughly $3 trillion.
That nearly thirtyfold gap shows how much larger the potential market for tokenized bonds, repo deals and other traditional instruments is compared with what people currently call the crypto market. The US and the EU are working on their own approaches to bringing tokenization into traditional finance at the same time, so the race is running on several continents at once.
The BCG estimate is only one of many. Different research firms publish their own forecasts for the size of the tokenized asset market, and the spread between them stays wide, since the industry still hasn't settled on a common counting methodology. Still, every estimate points the same direction: traditional finance is moving toward blockchain faster than it looked even a few years ago.
Who Backed the Push, and Where the Risks Sit
Ripple, whose XRP token is a familiar name to P2P wallet users, backed the initiative right away. In a Monday statement, the company wrote that onchain funds, bonds and repo "aren't experiments" anymore, but instruments that are already cheaper, faster and better than their legacy equivalents. Comments like these from taskforce members are setting the tone for the wider public debate around the report.
Still, the project has plenty of soft spots. Kirit Bhatia, Chief Digital Assets Officer at Banking Circle, named infrastructure as the biggest challenge. Tokenized assets need to be funded, settled, mobilized as collateral and moved across different networks. Without compatible payment rails, digital assets risk becoming faster only at the edges, while everything underneath still runs into the same legacy plumbing.
- Racing the clock: the US and the EU are testing their own tokenization models in parallel, and even a year's delay could cost the UK its first-mover status.
- Liquidity remains fragmented. Tokenized assets on different platforms don't interact well with each other, and merging these separate pools won't be easy.
- Political uncertainty: the report is addressed to a chancellor who hasn't been named yet, and a change of course at the Treasury could slow the plan down.
- Financial stability risks remain up for debate. The IMF previously warned about tokenization's potential link to crisis scenarios in a report on stablecoins and tokenization.
What the Next 12 Months Will Test
Talk of a "tokenization revolution" has been going on since at least 2017, and the industry has grown used to hearing it. What's different this time is that it isn't another white paper. It's a specific government, a specific deadline, and a list of banks that have publicly signed on to commitments.
The coming year will show whether the UK can move from reports to actual transactions. The first test is tokenized repo. The next milestone is the digital gilt in early 2027.
If Woolard's projections hold up, the City of London gains a new card to play against New York and Singapore for financial-center status. For now, though, this is a roadmap rather than a finished product, and rivals are moving on a parallel track with no intention of waiting.
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