Key facts
- The UK could add up to $44 billion to its annual economic output by 2035 by becoming a leader in tokenized financial markets.
- A government-backed report proposes issuing the UK's first tokenized government bond by the first quarter of 2027.
- The initiative aims to enable tokenized securities to be traded, settled, and used as collateral in live markets.
- The Bank of England is urged to accept digital gilts as collateral.
- Ripple stated that onchain financial instruments are more efficient than legacy systems.
The United Kingdom has the potential to significantly boost its annual economic output, adding up to 33 billion pounds ($44 billion) by 2035, by establishing itself as a leader in tokenized financial markets. This projection comes from a report by Wholesale Digital Markets Champion Chris Woolard, appointed by HM Treasury, which outlines a strategy for integrating blockchain technology into financial markets.
The report details a 12-month plan focused on testing blockchain for financial transactions, specifically using securities to borrow cash. A key objective is the issuance of the UK's first tokenized government bond, or digital gilt, by the first quarter of 2027. This initiative aims to move beyond isolated pilot programs to create live markets where tokenized securities can be actively traded, settled, and utilized as collateral.
Industry participants, including Ripple, have expressed support for the move, highlighting the efficiency and cost-effectiveness of onchain financial instruments compared to traditional systems. The UK has been developing its digital gilt capabilities, with previous announcements regarding a pilot program and plans for onchain settlement and secondary market development. HSBC's Orion platform has been selected to support the ongoing digital gilt pilot.
The report emphasizes that the value of tokenized securities is limited unless they can be readily traded or used to raise capital, and it specifically calls on the Bank of England to recognize digital gilts as eligible central bank collateral. The UK also possesses a supporting blockchain-based wholesale payment infrastructure, Fnality, which was launched in September 2025 and is designed to facilitate real-time repo transactions and the settlement of tokenized securities.