The UK government will appoint a Digital Markets Champion to lead efforts to digitise wholesale financial markets using blockchain technology, with a new taskforce overseeing the transition away from paper share certificates.
Economic Secretary to the Treasury Lucy Rigby announced the role at the Digital Assets Week conference in London on Wednesday, reports Bloomberg News. The Digital Markets Champion will coordinate private sector work on tokenising wholesale financial markets, where traditional assets, including stocks and bonds, are issued, traded and settled using blockchain technology.
A new Dematerialisation Market Action Taskforce will oversee the UK’s transition from paper share certificates. The announcements follow the government’s Wholesale Financial Markets Digital Strategy published in July, outlining plans to update systems through which assets are issued, traded, cleared and settled.
The strategy identified three areas: market optimisation by removing frictions, market transformation through distributed ledger technology and artificial intelligence, and market leadership through global coordination. The government committed to removing paper from wholesale markets and introducing a next-day T+1 securities settlement cycle in October 2027.
Digital gilts, known by the acronym DIGIT, will represent sovereign debt issuance on blockchain. The government began inviting bids from technology suppliers earlier this week. Features include facilitating settlement on distributed ledger technology, supporting interoperability between different infrastructure and encouraging development of collateral mobility solutions and secondary markets.
The government will enable testing through Financial Market Infrastructure Sandboxes including the Digital Securities Sandbox and the Private Intermittent Securities and Capital Exchange System. These sandboxes allow new regulatory frameworks to be created temporarily and then quickly made permanent.
The strategy supports digital payment innovations including stablecoins and tokenised deposits, with regulators exploring how stablecoins can be utilised in the Digital Securities Sandbox alongside the Real-Time Gross Settlement service.
The Digital Markets Champion will provide leadership on wholesale market digitalisation and join up work in the UK sector with other jurisdictions. The strategy commits to working with other jurisdictions to develop a global approach to digitalisation, reducing fragmentation to enable cross-border digital assets activity and support the UK’s status as a global financial hub.
