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UK regulator backs 'tokenised' funds to attract younger investors
Published by Global Banking & Finance Review®
Posted on October 14, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 14, 2025
2 min readLast updated: January 21, 2026
The UK's financial regulator supports tokenising funds to engage younger investors, using public blockchains like Ethereum to create crypto tokens.
By Phoebe Seers
(Reuters) -Britain's financial regulator set out plans on Tuesday to encourage asset managers to "tokenise" their funds on blockchain, in a move aimed at attracting younger investors.
Under the proposals being considered, UK asset managers would be able to create crypto tokens representing shares in their funds, using public blockchains like Ethereum. Until now, funds had only been able to use private blockchains.
Tokenisation - the process of creating blockchain-based versions of financial assets - has seen a revival of interest this year, helped by rising crypto prices and U.S. President Donald Trump's support for the crypto industry. Proponents say it can improve efficiency and cut the costs of fund management.
BRITAIN SEEKING A BIGGER ROLE IN CRYPTO
"Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers," Simon Walls, executive director of markets at Britain's Financial Conduct Authority, said in a statement launching a consultation on the plans.
The move is the latest sign of Britain's push to promote digital assets. The country's finance ministry last month announced plans to co-operate with the U.S. on crypto.
The FCA also sought feedback on whether to allow stablecoins - crypto assets that are pegged to a fiat currency - to be used as settlement for the funds.
In a press briefing, Nike Trost, interim director buy-side at the FCA, acknowledged that the benefits could take a while to materialise, as firms take time to upgrade their technology.
The watchdog said it was minded to act as technology was driving changes in consumer expectations around investing. Almost half (47%) of the users of trading apps are aged 18-34, the FCA said, and such apps typically sell low-cost investments in shares, or fractions of them, rather than funds.
The regulator said the possibility of allowing regulated funds to invest in cryptocurrencies would be considered in a future review.
(Reporting by Phoebe Seers. Additional reporting by Elizabeth Howcroft. Editing by Mark Potter)
Tokenisation is the process of converting rights to an asset into a digital token on a blockchain, allowing for easier transfer and management of assets.
A blockchain is a decentralized digital ledger that records transactions across many computers in a way that the registered transactions cannot be altered retroactively.
Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate on technology called blockchain.
Asset management is the systematic process of developing, operating, maintaining, and selling assets in a cost-effective manner.
A crypto wallet is a digital tool that allows users to store and manage their cryptocurrencies, enabling them to send, receive, and track their digital assets.
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