What are the common challenges startups face in equity tokenisation?

The most common challenges include navigating FCA regulatory requirements, selecting the right tokenisation platform, structuring the legal framework for tokenised equity, educating investors unfamiliar with digital securities, and ensuring compliance with the UK Digital Securities Sandbox rules.

What are tokenisation platforms and how do they work?

Tokenisation platforms are regulated technology providers that convert equity or other assets into digital tokens on a blockchain or distributed ledger. In the UK, platforms operating under FCA oversight include those participating in the Digital Securities Sandbox. They handle the technical issuance, custody, and transfer of tokenised securities.

What financial insights should founders know before tokenising equity?

Founders should understand the cost structure of tokenisation (legal, platform, and compliance fees), the valuation implications of fractional ownership, how tokenised equity differs from traditional equity crowdfunding, and the tax treatment of digital securities under UK law.

What investor strategies apply to tokenised equity?

Investors in tokenised equity can benefit from fractional ownership of high-value assets, improved liquidity through secondary market trading on regulated platforms, portfolio diversification across early-stage UK startups, and participation in deals previously accessible only to institutional investors.

What is the UK regulatory landscape for equity tokenisation?

The UK regulatory landscape is governed primarily by the FCA (Financial Conduct Authority) and HM Treasury. Key frameworks include the Financial Services and Markets Act 2023, the Digital Securities Sandbox (DSS), and ongoing FCA consultations on the treatment of tokenised securities. The UK is positioning itself as a global leader in regulated digital securities.

What is equity tokenisation?

Equity tokenisation is the process of converting ownership rights in a company into digital tokens recorded on a blockchain or distributed ledger. These tokens represent shares or equity stakes and can be transferred, traded, or held digitally, subject to regulatory compliance. In the UK, tokenised equity is treated as a regulated financial instrument under FCA oversight.

The regulators have decided: tokenisation is the future of UK wholesale markets

Shawn Jhanji
May 19
4 min read

On 15 May 2026, the FCA and Bank of England published something the market has been waiting for. Not a pilot. Not a sandbox update. A shared vision — and a roadmap.

The signal is clear. On 15 May 2026, the Financial Conduct Authority and the Bank of England published a joint statement setting out their shared vision for the future of tokenisation in UK wholesale markets. For anyone working in or watching the tokenisation space for any amount of time, as we have, this is the clearest regulatory commitment the UK has produced to date.

It is not a consultation on whether tokenisation should happen. It is a statement about how.

What they said

Simon Walls, Executive Director of Markets at the FCA, was direct: "Tokenisation has the potential to transform wholesale markets, reshaping how assets are issued, traded and settled. Today we are setting out the principles of a shared long-term vision to give industry the clarity it needs to engage, invest and innovate with confidence."

Sarah Breeden, Deputy Governor at the Bank of England, framed the moment precisely: "The task now is for public and private sectors together to build on these strong foundations, moving from pilots to production."

That phrase - moving from pilots to production, is the one to zoom in on. It signals a formal shift in official posture from exploratory to directional. The experiment is over. The build has begun.

What they committed to

The joint statement came with concrete action, not just aspiration . . . which is nice.

The Digital Securities Sandbox, launched by the FCA and Bank of England to allow live issuance and settlement of tokenised securities in a regulated environment, now has 16 firms working towards going live. The sandbox is no longer theoretical. It is operational.

The Bank of England is committing to launch a live synchronisation service, known as Synchro, with a target of 2028. This will allow tokenised asset settlement to connect with central bank infrastructure in real time. It addresses one of the core infrastructure blockers that has held the market back: final settlement in central bank money. When that link is live, tokenised markets will have the same settlement certainty as traditional ones.

The Bank is also consulting on extending RTGS and CHAPS settlement hours toward near 24/7 operation, with staged weekend and extended daily hours. The implication is significant. Tokenised assets will eventually settle continuously, not just during business hours.

HM Treasury is piloting the issuance of a digital gilt instrument, DIGIT, which is tokenised UK government debt. If the government is tokenising gilts, the direction of travel for capital markets more broadly is not ambiguous.

The FCA has published Policy Statement PS26/7 on fund tokenisation, moving it from experimentation to a working framework for wider adoption. And the FCA has committed to reviewing how client asset rules, the CASS regime, apply in a tokenised environment.

That review matters directly to how tokenised securities are held on behalf of investors, and its outcome will shape platform design across the industry.

The Prudential Regulation Authority separately wrote to bank chief executives on the prudential treatment of tokenised assets, stablecoins and cryptoasset exposures, and on innovations in deposits and e-money.

The regulated community is being told: think about this now, and think about it properly.

What this means

The most important thing about this statement is not what it commits the regulators to. It is what it commits the market to.

UK financial firms now have explicit regulatory endorsement to adopt tokenisation and distributed ledger technology with, as the FCA put it, "greater confidence." The question for firms in wholesale markets is no longer whether to engage. It is when, and how.

For the early-stage market, the signal is equally significant, even if the wholesale market language can feel distant. What the FCA and Bank of England are building at institutional scale today is the infrastructure that the entire capital markets ecosystem will operate within tomorrow. Tokenised securities, streamlined issuance, programmable settlement: these are not features reserved for banks and central counterparties. They are the direction the market is heading at every level.

TokenisingStartups exists precisely at this moment. The UK's first dedicated platform for founders exploring equity tokenisation is meeting the early-stage market at the beginning of its journey, as institutions build the foundations that early-stage companies will build on next.

The Call for Input from the FCA and Bank of England is open until 3 July 2026. Industry participants, including firms at the earlier end of the market, are encouraged to respond.

Sources

FCA and Bank of England, FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets (press release, 15 May 2026)
FCA and Bank of England, Call for Input: The future of tokenisation, a joint vision from the authorities for UK wholesale markets (18 May 2026, closes 3 July 2026)
FCA, Policy Statement PS26/7: Progressing fund tokenisation (April 2026)

TokenisingStartups is an independent editorial platform for founders and advisors exploring equity tokenisation in the UK. This article is for information purposes only and does not constitute financial, legal or investment advice.

The regulators have decided: tokenisation is the future of UK wholesale markets

What they said

What they committed to

What this means

Sources

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