There are apparently 2,600 asset managers in the UK, entrusted with £14 trillion worth of assets.
We have names like Legal & General (LGEN.L), UK’s largest asset manager with £1,117 billion in AUM, generating revenue that far exceeds its market capitalization.
The United Kingdom’s Financial Conduct Authority (FCA) has now set out plans to support these asset managers in embracing tokenization and drive innovation.
The FCA has acknowledged that tokenization will help asset managers to innovate and stay competitive. Future markets are not just digital, but will be built atop fast and decentralized tech - the blockchains.
Allowing asset managers to deploy, with clarity, digital representation of traditional assets on distributed ledgers is one way to give these companies a shot at staying strong in the game.
The United Kingdom’s Financial Conduct Authority (FCA) revealed a roadmap to help asset managers adopt blockchain technology for fund tokenization.
In a Tuesday announcement, the regulator said the initiative aims to “provide firms with additional clarity” to adopt tokenization and “drive innovation and growth in asset management.”
Tokenization has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers,” said Simon Walls, executive director of markets at the FCA. “There are many things that firms can do under our existing rules and more that become possible with the changes we propose enacting now,” he added.
According to the FCA, tokenized products can increase competition, reduce costs and broaden investment access, particularly to private markets and infrastructure. By digitizing fund operations, asset managers could also lower reconciliation and data-sharing costs. - Cointelegraph report
I can't say that it isn't comical when traditional companies and regulators/government talk about cutting costs in regards to the financial system, I mean, these are costs that are put in place by no other persons but themselves.
Blockchain’s cost saving alternative was never about improving their system, because that has always functioned as intended. It was rather about giving users of these broken and costly system, something not just cheaper but more powerful.
But we can pretend we don't know this and applaud regulators for acknowledging that blockchain will help traditional companies save costs.
After all, they are bringing trillions on-chain and effectively handing the decentralized ecosystem a golden opportunity to attract said liquidity and build away from the claws of the centralized system it came from.
Blockchain is the financial layer for the future. Everyone knows it now and within a decade, most things will run, on-chain, especially money!
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