Thank you, Bob, and to UK Finance for orchestrating this gathering today. I am truly grateful for the invitation.
As many of you are aware, I have recently transitioned from my role as City Minister. Although the position of Chief Secretary cannot be likened to a holiday—my previous breaks have certainly been more relaxing—it is nonetheless exhilarating to return and champion the financial services sector, which plays a pivotal role in fostering growth and prosperity across the UK.
Advancements in Digitalisation and Tokenisation
I am heartened to observe that during my absence, the agenda surrounding digitalisation and tokenisation has gained considerable traction. Building on this momentum is one of the primary objectives I am eager to pursue upon resuming my responsibilities.
Historically, we have witnessed waves of technological advancements that have enhanced our lives, introducing new products and services to both physical and digital marketplaces. However, there are also transformative periods in economic history when technology reshapes the foundational infrastructure of an economy. The transition from paper to electronic trading in the 1980s and 1990s drastically altered our financial markets, and I firmly believe we are now entering a similar transformative phase with the shift from electronic to digital processes.
It is a privilege to be present as UK Finance unveils this pivotal report. This document, which builds upon the Digital Wholesale Champion’s findings published in July, sends a resounding message to the sector: digitalisation is no longer an ancillary discussion; it is firmly established in the mainstream.
Significant Opportunities for Growth
This shift is significant because it presents vast opportunities—not only for the City and the financial services industry but also for the broader UK economy.
Today, I am here to convey a straightforward message: the digitalisation of wholesale financial markets has become a national priority. This initiative necessitates a collaborative effort among industry stakeholders, government entities, and regulatory bodies to maintain and enhance our global competitiveness in an increasingly fierce landscape.
While the government has a role in fostering an environment conducive to growth and advocating for the UK, and regulators provide essential clarity, it is ultimately the industry—the market participants like yourselves—who innovate, compete, and carve out new pathways for progress.
The Imperative of Collaboration
This is why the work of organisations such as UK Finance is vital, and why I wholeheartedly endorse the report released today. One salient point has emerged through my discussions with firms across the sector: the question is not if wholesale markets will embrace tokenisation, but rather when this transition will occur.
Moreover, it is crucial for the UK to act swiftly enough to become a frontrunner in this global shift, and I firmly assert that we are capable of achieving this.
Significantly, 2026 is shaping up to be a landmark year for implementation. We have already seen the release of the inaugural report from Chris Woolard, the UK’s Wholesale Digital Markets Champion. This document outlines an industry-driven roadmap aimed at accelerating the digitalisation of UK wholesale financial markets, identifies priority use cases, and addresses key practical issues that must be resolved for digital markets to scale effectively.
Establishing Industry Action Groups
The report also establishes nine industry action groups, and I eagerly await the announcement of their composition. It is encouraging to witness a diverse array of firms, from new entrants to established players, participating alongside senior individuals who are generously contributing their expertise and time.
I am keen to see the outcomes of this next phase. The success of this initiative hinges not so much on the technology itself—since the necessary tools already exist and we have skilled individuals and organisations ready to deploy them—but rather on the coordination required to construct a cohesive framework.
Key Questions for the Future
This leads to crucial questions: How can firms coordinate their efforts? How do platforms interact effectively? How do we ensure interoperability? How do we foster liquidity? What common standards must we establish to ensure the UK leads the global dialogue? And how do we cultivate sufficient confidence for markets to transition from pilot projects to full-scale operations?
Addressing these questions is why this work is of such paramount importance. Additionally, we must consider how the government and regulators can ensure that regulation adapts appropriately to accommodate digitalisation.
Regulation often faces criticism for its sluggishness in responding to new technological challenges and rapidly evolving environments. However, we are actively working to address this issue.
Innovative Approaches to Regulation
As you may know, we have established the Digital Securities Sandbox, which provides a flexible framework for adapting UK legislation, enabling firms to introduce innovative digital solutions to the marketplace. Currently, 16 firms are engaged in this initiative, with the first firm recently approved to conduct live activities, and I anticipate that more will follow suit shortly.
We recognise that there is still much to be done to ensure that the UK’s legal framework supports digitalisation beyond the sandbox, building on the government’s previous efforts to clarify the law.
We will be actively engaging with the sector to outline the necessary changes and develop a plan for their implementation, including leveraging existing legislative tools to facilitate these adjustments.
Progressing the Digital Market Ecosystem
This effort is part of a broader governmental initiative to support digital advancements. This year, we have also made notable strides regarding the Digital Gilt Instrument, or DIGIT, which will be crucial in laying the groundwork for a more extensive digital market ecosystem. DIGIT is slated for issuance in the first quarter of 2027, and we have expressed our intention to prepare for potential further issuances, contingent on the success of the initial transaction.
Furthermore, we are actively working to modernise the UK’s payments ecosystem through infrastructure enhancements and regulatory reforms that support stablecoins, tokenised deposits, and the next wave of digital settlement.
I would like to commend the efforts of UK banks in advancing the Great British Tokenised Deposit initiative, collaborating with UK Finance to introduce tokenised sterling deposits to the UK market. This initiative to tokenise bank deposits aligns with the government’s and regulators’ efforts to create a regulatory framework for stablecoins, ultimately aimed at providing payment settlement solutions for a truly digital marketplace.
Looking Ahead
As we navigate these transformative developments, we are entering a crucial delivery phase this Autumn. Let us continue to collaborate, whether it be through the exemplary leadership demonstrated by UK Finance, the dedication of Chris Woolard and the Wholesale Digital Markets Champion Taskforce, the Digital Securities Sandbox, or the DIGIT initiative. Each of these elements represents a unique facet of the same overarching narrative—a narrative of a sector and a city committed to innovation, driven by a collective sense of pride and ambition to lead.
It is a story of a nation choosing to modernise, united by a common purpose to ensure that the markets of the future are developed right here in the United Kingdom.
Thank you.