UK says tokenized markets could unlock £33B economic boost by 2035
A government-commissioned report landed on Chancellor Rachel Reeves' desk this week with a single, hard number: £33 billion in additional annual economic output by 2035 — if the UK moves decisively on tokenized wholesale financial markets.
£33 Billion on the Table — London Bets Tokenized Markets Will Secure Its Future
The DIGIT Deadline and the Settlement Bet
The report recommends launching the Digital Infrastructure and Government Tokenisation — DIGIT — pilot by Q1 2027, alongside expanded tokenized collateral, repo markets, and investment fund structures. But the real capital signal sits in the settlement layer. Woolard's report explicitly pushes for a domestic ecosystem built on stablecoins, tokenized commercial bank deposits, and — where appropriate — central bank money. Participants in the existing Digital Securities Sandbox can already seek approval to use certain stablecoins for settlement, meaning the regulatory perimeter is already shifting.
For institutional allocators tracking custody and settlement risk, this is the tell: London is building a multi-asset settlement stack, not waiting for a single CBDC verdict. That's a deliberate hedge against regulatory arbitrage from competing jurisdictions.
54 Firms, One Direction of Travel
The market-readiness signal is equally concrete. Fifty-four firms — including BlackRock, Goldman Sachs, Morgan Stanley, HSBC, Standard Chartered, and Ripple — have reportedly joined the UK's tokenization push. The report estimates tokenized real-world assets globally could reach $88 trillion by 2035, dwarfing the current digital asset market cap. London's play is not to chase crypto retail flows; it's to capture the wholesale infrastructure layer before Frankfurt, Singapore, or Dubai lock in their own standards.
What Institutional Players Should Watch
The report's core risk argument is straightforward: the UK cedes ground to competing financial centres unless implementation accelerates. For fund managers and prime brokers, the immediate variables to track are the DIGIT pilot timeline, the evolution of stablecoin eligibility criteria within the Digital Securities Sandbox, and whether Treasury translates these recommendations into a technology-neutral tax and regulatory framework before rival jurisdictions do the same.
The £33 billion figure is a projection — not a guarantee. But the regulatory direction is no longer ambiguous. Capital follows legal certainty, and London is now pricing in both.