British investment managers have received approval to create tokenized funds, indicating a move towards using blockchain technology in mainstream asset management. The Investment Association announced that funds authorized by the UK’s Financial Conduct Authority (FCA) can now begin creating tokenized funds. However, these funds must invest in mainstream assets with unchanged valuation and settlement processes. The initiative has garnered support from influential members of the industry, such as BlackRock, M&G, and Schroders. This aligns with Britain’s strategy to revitalize its asset management sector post-Brexit by leveraging innovative technologies. Globally, tokenized funds are gaining traction, with Asia and the United States leading the way. A report by Calastone revealed that a significant percentage of firms in these regions are actively involved in fund tokenization projects.
The future of tokenized funds looks promising, as a survey by Calastone indicates that a majority of asset managers in the US and Asia anticipate launching tokenized products within a year. Additionally, Asian asset managers expect to tokenize funds within three years. This highlights the global shift towards this innovative investment approach. As the UK joins this movement, it is contributing to the redefinition of asset management by combining traditional finance with blockchain technology for a more efficient and inclusive market.
Hot Take: Tokenized Funds Pave the Way for Mainstream Blockchain Adoption
The approval for tokenized funds in the UK marks an important step towards mainstream adoption of blockchain technology in asset management. By allowing investment managers to create digital tokens backed by blockchain technology, this initiative offers benefits such as increased efficiency, liquidity, and risk management. It also aligns with global trends where regions like Asia and the US are already making progress in implementing fund tokenization projects. As more countries embrace this innovative approach, we can expect to see further integration of blockchain technology into various industries beyond cryptocurrency.
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