UK Treasury Launches Tokenization Task Force with BlackRock, Goldman Sachs, and JPMorgan

The UK government has formally launched a financial market tokenization task force in partnership with 54 major financial institutions, including BlackRock, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, and UBS. The initiative, led by the UK Treasury and supported by the City of London Corporation, aims to develop real-world use cases for tokenization in the country’s financial markets over the next year.

Initial Focus on Tokenized Repurchase Agreements

The task force will initially concentrate on tokenized repurchase agreements, or Repo transactions, which are a cornerstone of short-term institutional borrowing and liquidity management. By digitizing these instruments on blockchain-based platforms, the group aims to improve settlement speed, reduce counterparty risk, and increase transparency in one of the most systemically important segments of the financial system.

Tokenization involves representing ownership of traditional assets — such as bonds, equities, or cash equivalents — as digital tokens on a distributed ledger. This allows for fractional ownership, faster transfer, and automated compliance through smart contracts.

BCG Projects $88 Trillion Tokenized Asset Market by 2035

In a related report, Boston Consulting Group (BCG) projected that the global market for tokenized real-world assets (RWAs) could reach $88 trillion by 2035. That figure far exceeds the current total cryptocurrency market capitalization of roughly $3 trillion, underscoring the scale of institutional interest in blockchain-based finance beyond speculative crypto assets.

BCG also estimated that widespread adoption of tokenization could boost the UK’s annual economic output by up to £33 billion and increase its annual tax revenue by £14 billion by 2035. These projections are based on efficiency gains from reduced settlement times, lower operational costs, and the ability to unlock illiquid assets such as real estate and private credit.

Why This Matters for the Broader Market

The involvement of the UK Treasury and the City of London Corporation signals that tokenization is moving from experimental pilot projects toward mainstream regulatory and institutional acceptance. The UK has been positioning itself as a global hub for digital asset innovation since the passage of the Financial Services and Markets Act 2023, which granted regulators broader powers to oversee crypto and digital asset activities.

For market participants, the creation of a formal task force with such high-profile members suggests that tokenized Repo markets could become operational within the next 12 to 18 months, potentially setting a precedent for other jurisdictions. The initiative also aligns with broader efforts by the Bank of England and the Financial Conduct Authority to explore a digital pound and improve wholesale settlement infrastructure.

Conclusion

The UK Treasury’s tokenization task force represents a significant step toward integrating blockchain technology into the core infrastructure of one of the world’s largest financial centers. With participation from the largest asset managers and investment banks, and supportive economic projections from BCG, the initiative has the potential to reshape how financial assets are issued, traded, and settled. The focus on Repo markets as a starting point provides a concrete, measurable use case that could demonstrate the real-world benefits of tokenization beyond the cryptocurrency ecosystem.

FAQs

Q1: What is tokenization in financial markets?
Tokenization is the process of representing ownership of a real-world asset — such as a bond, stock, or cash equivalent — as a digital token on a blockchain or distributed ledger. This enables fractional ownership, faster settlement, and automated compliance.

Q2: Which institutions are part of the UK tokenization task force?
The task force includes 54 financial institutions, notably BlackRock, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, and UBS. It is led by the UK Treasury and supported by the City of London Corporation.

Q3: How large could the tokenized asset market become?
Boston Consulting Group projects the global tokenized real-world asset market could reach $88 trillion by 2035, compared to the current crypto market capitalization of about $3 trillion.