BlackRock and HSBC Back UK Tokenization Push

The 54-company task force wants to turn pilots into live markets, with a focus on repos and DIGIT. The FCA and stablecoin plans also make the timing important for London.

Key Takeaways

• BlackRock and HSBC are joining a UK tokenization task force with 54 companies.
• A government report estimates tokenization could add up to $44 billion a year to the UK economy by 2035.
• The task force is focused on repos, DIGIT, and scaling further into regulated live markets.

BlackRock and HSBC have signed on to a UK tokenization initiative that could increase annual economic output by as much as $44 billion (€38.5 billion), according to a government report. The group now spans 54 companies and is designed to help move tokenization from pilot programs into live markets. The first roadmap was delivered to the UK Treasury in July 2026.

Big Money Is Backing Tokenization

Tokenization takes assets such as bonds, funds, and real estate and represents ownership as digital tokens on a blockchain. Advocates say that approach can lower costs, speed up settlement, and free up capital that is still trapped in older back-office systems.

The economic argument comes from a study by Barclays and PwC. It puts the potential boost to the UK economy at $44 billion (€38.5 billion) in 2035, though that figure is clearly the high-end scenario rather than the baseline. Under a more cautious outlook, the annual gain would be about $29 billion (€25.4 billion), along with $19 billion (€16.6 billion) in additional tax revenue.

Those numbers line up with a market that is still relatively small, but expanding quickly. Tokenized real-world assets were worth around $30 billion (€26.3 billion) in 2025, and several forecasts suggest the broader tokenization market could grow much larger in the years ahead. That is making early positioning more important for major financial firms.

Banks and Market Infrastructure Are Joining In

BlackRock and HSBC show how deeply traditional finance has already moved into tokenization. BlackRock manages BUIDL, the largest tokenized US Treasury fund, with about $2.4 billion (€2.1 billion) in assets, while HSBC has already issued digital bonds through its Orion platform.

The task force looks like a broad snapshot of global finance. In addition to JPMorgan, Goldman Sachs, Morgan Stanley, Citi, Deutsche Bank, and UBS, it includes Fidelity International, Schroders, and State Street. Market infrastructure groups such as DTCC, Euroclear, and London Stock Exchange Group are also part of it, alongside crypto firms Circle, Ripple, and Coinbase.

The UK has already seen a handful of pilot projects. Lloyds, Aberdeen, and Archax completed a tokenized foreign exchange trade with collateral in 2025, and Baillie Gifford and BNY launched the country’s first fully tokenized investment fund in June 2026. Moves like these are helping push tokenization beyond the experimental stage and closer to regulated markets.

DIGIT Is Meant to Be the Breakthrough

The next step is to scale these efforts one use case at a time. The first target is the repo market, where firms borrow short-term cash against securities used as collateral. Woolard’s group is aiming for a live tokenized repo trial in spring 2027, with fixed income and derivatives to follow.

The most ambitious project is DIGIT, a digital government bond instrument that is expected to reach pilot form by the first quarter of 2027 at the latest. If that timeline holds, the UK would become the first G7 economy to issue tokenized government debt. For observers of European crypto and capital markets, that is a notable milestone because it shows how quickly tokenization is moving from a blockchain concept into regulated financial infrastructure.

The UK regulator is moving in step with that effort. The Financial Conduct Authority will begin accepting applications for its cryptoasset regime on September 30, 2026, with a full rollout set for October 2027. At the same time, policymakers are working on broader stablecoin plans for that same year, which makes the timing of the tokenization push even more important.

There is still one major challenge, though: trading in tokenized assets remains thin, and liquidity is often limited. Over the next few months, the task force will need to show that these pilots can actually develop into live markets.