BlackRock, Goldman Sachs and JPMorgan join UK tokenisation taskforce

The British government is attracting major names from the financial world for an ambitious tokenisation project. 54 parties, including BlackRock, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley and UBS, are joining a government-backed taskforce aiming to develop concrete tokenisation applications. The starting point is tokenized repo, and the group will work on a viable framework over the next twelve months.

Billions in economic impact expected

In a report, the UK Treasury estimates that tokenised markets could be worth as much as £33 billion in annual economic output by 2035. On top of that comes an additional £14 billion in extra tax revenue. These are substantial figures that make clear why the government is pushing so actively on this path.

The report, published under the heading ‘Wholesale Digital Markets Champion’, is addressed to the UK Chancellor of the Exchequer and was developed together with the industry. The document focuses specifically on the future of the wholesale market in financial products and how tokenisation can play a central role in it. The full report can be read here.

Tokenized repo as a first step

The taskforce deliberately chooses a phased approach. Tokenized repo, where short-term loans are recorded on a blockchain, serves as the first practical use case. This type of instrument lends itself well to tokenisation because it increases transaction speeds, reduces risks and lowers settlement costs.

The involvement of so many large institutions at the same time indicates that interest in tokenisation of traditional financial products is growing strongly. BlackRock has been active in this area for some time. BlackRock’s BUIDL fund, which previously surpassed the $900 million mark on Avalanche, shows that the asset manager takes tokenisation seriously. The British taskforce is therefore a logical next step towards broader institutional adoption of blockchain in the financial sector.