25/06/2026

Tokenisation on the rise: Opportunity meets uncertainty

The UK government is continuing its push to position the UK as a global hub for digital finance, with tokenisation playing a central role in its latest plans. While the potential benefits are significant, important questions remain—particularly around how tokenised assets will be accounted for.

What’s happening?

As part of a broader package announced during UK FinTech Week in April, the government set out measures to support the adoption of digital payment technologies—many of which rely on tokenisation.

To drive this agenda forward, Chris Woolard (EY Partner) has been appointed as the UK’s Wholesale Digital Markets Champion. In parallel, the UK and US have established a Transatlantic Taskforce for Markets of the Future, aimed at strengthening collaboration on digital innovation, with findings expected later this year.

What is tokenisation—and why does it matter?

Tokenisation refers to the digital representation of real-world assets—such as property, equities or funds—on blockchain or distributed ledger technology.

This approach allows assets to be divided into smaller, tradable units, opening up investment opportunities to a wider pool of investors. For example, rather than purchasing an entire asset, investors can own fractional interests, significantly improving accessibility.

The key advantages include:

increased liquidity: Assets that are traditionally difficult to sell can be broken down and traded more easily
enhanced flexibility: Portions of an asset can be used as collateral or for funding
potential cost efficiencies: Tokenisation may offer a simpler, more cost-effective alternative to traditional structures such as securitisation

Additionally, advances in blockchain technology—particularly atomic settlement—could enable near-instant transactions, reducing reliance on intermediaries and lengthy settlement periods.

Where are we now?

Adoption is still at an early stage, but momentum is building. The UK government is already exploring a Digital Gilt Instrument (DIGIT), working with HSBC as a platform provider, while consultations from the Financial Conduct Authority (FCA) have focused on tokenising assets such as equities and money market funds.

Looking ahead, the potential applications are wide-ranging. For example, tokenisation could streamline complex processes such as property transactions by reducing the number of intermediaries and automating key checks.

What are the challenges?

Despite its promise, tokenisation raises several practical and regulatory challenges:

infrastructure costs: Significant upfront investment is required to build the necessary systems (“asset rails”)
legal uncertainty: Questions remain around ownership rights, particularly for fractional interests in assets
interoperability issues: Different blockchain platforms are not always compatible
risk considerations: Scenarios such as asset disposal or damage raise complex legal and insurance questions

Accounting and tax considerations

For accountants, one of the most pressing issues is the lack of clarity around how tokenised assets should be treated.

Key areas of uncertainty include:

how fractional ownership should be recognised and measured
the accounting implications of blockchain-based transactions and settlement mechanisms
the tax treatment of new settlement forms, including cryptocurrencies and stablecoins

These questions are closely linked to legal and regulatory developments, meaning further clarity will be needed before consistent frameworks can be established.