The UK Financial Conduct Authority has approved new rules enabling tokenized funds to operate within its existing regulatory framework, allowing asset managers to use blockchain for fund registers and settlement. The policy statement PS26/7, published April 30, 2026, introduces a Direct-to-Fund dealing model that enables single-step settlement between investors and funds on-chain. The move marks a shift toward integrating tokenized finance into the regulated perimeter rather than allowing parallel experimental structures.
FCA Modernizes Fund Infrastructure for Blockchain
The FCA’s approval codifies the Blueprint model, an industry standard already in use by the first tokenized UK UCITS fund authorized under the new rules. The framework allows asset managers to maintain on-chain transaction records as primary books of account without requiring off-chain duplicates, provided firms establish appropriate resiliency plans. Simon Walls, Executive Director of Markets at the FCA, stated that “tokenization would play an important role in asset management” and that the regulator had delivered “a practical framework to give firms confidence in how fund tokenization can operate within the FCA’s rules.” The decision supports the FCA’s January 2025 digital assets roadmap, outlined in a letter to the prime minister, which committed to integrating blockchain infrastructure into regulated markets.
Blueprint Model Enables Multi-Chain Fund Issuance
The approved framework supports unit issuance across multiple blockchains, reducing infrastructure lock-in for asset managers. Direct-to-Fund dealing eliminates intermediaries in settlement, shortening transaction cycles and reducing counterparty risk. The first tokenized UCITS already operates under this model, signaling industry readiness to adopt the new rules. The FCA’s decision to integrate tokenized funds into existing UCITS frameworks rather than create separate categories maintains investor protections while enabling operational innovation. Asset managers can now offer fund units on-chain without establishing parallel custody or settlement infrastructure.
Broader DLT Strategy Extends Beyond Fund Tokenization
The tokenized funds rules represent the first phase of the FCA’s digital ledger technology strategy. The regulator plans to seek further views on wider DLT use in wholesale markets during 2026, with the full cryptoasset framework due to take effect in October 2027. This phased approach allows the FCA to test governance, resiliency, and operational standards in the funds space before expanding blockchain use across equities, fixed income, and derivatives markets. UK asset management firms now have a defined regulatory pathway for tokenization, potentially attracting both domestic and international capital to London’s asset management sector.
Next Steps: Resiliency Standards and Stablecoin Clarity
The framework leaves several implementation details unresolved. The FCA has not published specific requirements for “appropriate resiliency plans,” creating ambiguity for firms evaluating on-chain infrastructure vendors. Decisions on stablecoin and digital cash waivers remain pending, which could affect settlement currency options for tokenized funds. Asset managers implementing Blueprint-compliant systems should expect regulatory guidance on disaster recovery and operational resilience standards as the October 2027 deadline approaches.
