The U.K.’s opposition party, Labour, has announced its plans to make the country a hub for securities tokenization and promote the development of a digital pound. With an election expected to take place this year, Labour is currently leading the incumbent Conservatives in the polls.
In a 28-page document titled “Financing Growth,” Labour outlines its vision for the financial sector, which includes making the U.K. a sustainable finance hub, scaling regional finance centers, and embracing fintech innovation. The party aims to position the country as a global leader in tokenization, a process that involves the digital representation of financial assets using distributed ledger technology.
Labour believes that tokenization presents a significant opportunity for the U.K., with investment bank Citi Group estimating that tokenized assets could be worth close to $4 trillion globally by 2030. By embracing tokenization, the party aims to increase liquidity in financial markets and provide access to new asset classes.
To achieve this, Labour plans to clarify the legal framework around tokenization and work with regulators to establish a proportionate and outcomes-based regulatory regime. The party also intends to further develop digital-asset regulatory sandboxes and explore the possibility of hosting a test issue of tokenized U.K. government bonds. Additionally, Labour aims to collaborate with other financial centers to establish interoperable standards and enable the trade of tokenized assets across borders.
Labour’s support for the digital pound is another key aspect of its financial agenda. The Bank of England has been working on a central bank digital currency (CBDC), and Labour fully supports these efforts. The party recognizes the need for a state-backed digital pound to protect the integrity and sovereignty of the Bank of England and the U.K.’s financial and monetary system. Labour also emphasizes the importance of addressing concerns related to privacy, financial inclusion, and stability in the design of a CBDC.
The party’s plans for tokenization and the digital pound have been welcomed by CryptoUK, a lobby group representing the cryptocurrency industry. The spokesperson for CryptoUK expressed support for Labour’s initiatives in a statement.
It remains to be seen how these proposals will be implemented and whether Labour will come to power in the upcoming election. However, the party’s focus on tokenization and the digital pound reflects the growing recognition of the potential of blockchain technology and digital currencies in the financial sector.