Everything will be tradable. By anyone. Anywhere. Anytime.

The increasing adoption of decentralised ledger technology (DLT) and digital assets has the potential to reshape financial markets on a global scale. Tokenisation (the representation of traditional and real-world assets with tradeable programmable tokens on DLT) in particular promises to increase liquidity, efficiency, and broader access to markets, impacting inexperienced retail to institutional behemoths.

Whilst DLT’s potential to create a system free from jurisdictional markets is appealing, it typically operates more in favour of speed than safeguards. This is likely to unleash a flood of assets of uneven quality across countless platforms serving a global customer base.

Regulation is a reality that cannot be bypassed: left to drift, private providers will stitch together bilateral, lightly regulated pathways, and fragmentation will follow. The UK, however, has long been a dominant force in constructing safe, resilient, competitive markets which it can replicate with digital assets.

Can the UK lead in new 24/7 markets and be at the forefront of the digital economy whilst retaining its ‘gold standard’ regulatory reputation?

3 Key Building Blocks

Markets are built on trust, and trust depends not just on technology but also the legal recognition of what you bought and legal enforceability of said ownership. Without legal backing, participants are trading based on hope, not certainty.

The UK already has the key building blocks in place to develop secure digital markets:

1. Settlement finality: The most crucial is English law’s recognition of settlement finality, protecting financial collateral, and the electronic recording of securities inside supervised market utilities. Transfers complete together, settlement is enforceable by law, and the result cannot be unwound later during an insolvency.
2. Legal recognition of digital assets as property: Passed into law in December 2025, the Property (Digital Assets etc) Act has made digital assets a clear category of property in England and Wales (noting that a similar bill is working its way through the Scottish Parliament, to allow property law in Scotland to align with English law), enabling ownership enforcement and its use as collateral under settlement finality, at least for now under English law. This will transform margin management and capital efficiency.
3. Digital Securities Sandbox (DSS): operated by the Bank of England and Financial Conduct Authority (FCA) with 16 participating firms already, the DSS applies existing legal frameworks to new DLTs. This provides a supervised path to run real issuance, trading, and settlement using DLT. What works will fold into rulebooks, pushing the established boundaries of institutional finance.

With this legal foundation, the UK’s digital asset post-trade plumbing can be installed.

3 Steps to Shape Digital Asset Market Structure

In most markets, clearing and settlement are distinct on purpose. clearing mutualises risk and manages default with settlement finalising trades with legally final transactions.

We should follow that logic in digital markets too, through a strategic development of each post-trade layer:

1. Start with standardised, supervised settlement. The settlement layer should be horizontal to connect many trade sources, custodians and banks and eliminate liquidity silos. Everyone can use it across venues and custodians.
2. Extend into a durable, neutral clearing layer so risk is shared transparently in a clearing model that can scale.
3. Enable legal settlement finality, moving digital assets into the same legal end-state that institutions already trust, as demonstrated by the DSS. Earnest efforts are already underway, including the Treasury’s exploration of primary issuance on DLT with the digital gilt pilot, DIGIT.

With established post-trade financial market infrastructure, everything else then becomes easier, including pricing, liquidity, custody, and consumer protection. For example:

• Transparent, published rules replace venue-by-venue policies, reducing uncertainty.
• Pre-funding requirements are reduced.
• Multilateral netting consolidates open positions (and margin requirements) at the clearing layer and condenses obligations at the settlement layer, freeing up balance sheets and increasing capital efficiency.
• Delivery versus Payment (DvP), ensures simultaneous, synchronised settlement, eliminating credit risk.
• Treasury forecasting is made predictable through standard settlement processes, streamlining operations.

These developments are the signs of a healthy market structure and align with the UK’s comparative advantage: clear law, capable supervisors, and a deep bench of participants who understand why financial market infrastructure matters.

Championing UK Digital Transformation

In July, the UK government announced that it would appoint a Digital Markets Champion (DMC) in their Wholesale Financial Markets Digital Strategy with a clear mandate to lead the UK’s tokenisation efforts, uniting the Government, regulators and industry.

To deliver the post-trade market infrastructure required for the safe scaling of the digital asset markets, we suggest that their priorities should focus on:

1. UK law: The DMC must drive joint work between the Treasury, the BoE and industry to anchor digital assets in the UK’s legal system. The Treasury and the BoE should issue a joint confirmation that immobilising assets within UK central securities depositories (CSDs) and emerging digital securities depositories (DSDs) fits within the current framework for tokenisation as an extension of the existing CSD and Uncertificated Securities Regulations 2001. DIGIT is already planning to operate on this assumption, to make the principle clear so issuers and intermediaries can act.
2. Standardising issuance data: Secondary markets depend on accurate, machine-readable descriptions of instruments and cash flows and it would be beneficial to encourage standards like the common domain model (CDM) and ACTUS for securities and derivatives, for example. Composable data enables automation, reduces issuance costs and builds a UK industry around verification and attestation.
3. Certifying identity to distribute at scale: Distribution requires trust in who holds what, so creating a recognised certification scheme for wallet identity, similar in spirit to SWIFT BIC issuance and drawing on open standards work (for example the ERC3643 token standard) is imperative. Banks and custodians can be credentialed and extend identity services to clients, and whilst adding know-your-customer and anti-money laundering assurances. This way, by including regulated participants, mass distribution through cryptographic validation, becomes possible.

None of this slows technological innovation. It accelerates it.

With ownership protected by law and backed by settlement finality, firms will be able to build on stable assumptions and to grow through data and identity standards that unlock scale and trust. We anticipate that issuance and distribution will see the most change and innovation in delivering 24/7 digital markets.

The Race is On to Build the Plumbing for a Unified Market Structure

The UK has the tools, framework and ambition. Now, we should let the market do what it does best: compete on service, price and ideas on top of rails we can all can trust. If the rails are sound, CSDs, and DSDs will evolve to handle more transparency and decentralisation, higher volumes and broader asset types, driving costs down across the lifecycle. The UK will then export not only services but standards.

That future is arriving whether we plan for it or not. The question is: will the UK shape it, or let others make the rules?

Our white paper lays out how a CSD approach on DLT, using DvP, turns 24/7 trading into final, legally enforceable settlement.