The UK trade body for investment managers has thrown its support behind the push to tokenise the UK’s government bond issuance.
The IA released a note to market noting how the DIGIT Pilot — the UK government initiative trialling the issuance of digital gilts using blockchain technology – was an opportunity for the domestic industry to embrace.
Commenting on the Preliminary Market Engagement Exercise for the DIGIT Pilot, John Allan, head of innovation and operations unit at the Investment Association, said:
“The UK investment management industry is ideally placed to deliver a digital gilt, supported by our vibrant fintech landscape, professional services cluster, and capital markets ecosystem,” said Allan.
“For investors, it has the potential to unlock access to innovative investment opportunities with a stable and reliable return profile.”
Allan also emphasized the market’s readiness for tokenization and urged key stakeholders to collaborate in accelerating the delivery of the digital gilt.
“We expect strong appetite for investment in DIGIT and with numerous examples of tokenised MMFs already available, this is an opportunity to create a joined up digital market where digital securities are packaged into diversified portfolios and delivered to investors in tokenised form – a huge success story for UK-led innovation,”
The IA has also stated its desire to work with regulators to accelerate the delivery process of gilts.
“We want to see a digital gilt established quickly and will work with the government, regulator and our members to achieve this,” he said.
To read more about the IA’s work on tokenisation, read John Allan’s interview in the launch issue of Capital Pioneer.
