The Association for Financial Markets in Europe (AFME) today called on the UK Government and regulators to adopt an ambitious, coordinated strategy to secure a global leadership position in Distributed Ledger Technology (DLT)-based capital markets.
AFME welcomes the UK’s initial steps towards DLT adoption, including the Digital Securities Sandbox, the DIGIT Pilot sovereign debt programme, and plans for enhanced international cooperation via the US-UK Taskforce for Markets of the Future. These initiatives demonstrate the UK’s potential to become a hub for on-chain global capital markets.
However, AFME warns that without a clear national vision and urgent coordinated action, the UK risks falling behind other international financial centres that are accelerating adoption of DLT-based solutions and DLT-based activities will move away from the UK.
Coco Chen, Associate Director of Technology and Operations at AFME, said: “The UK has all the ingredients to lead the next generation of capital markets globally. DLT offers the opportunity to make markets more efficient, innovative, and accessible, but to fully realise this potential, the UK needs to deliver on an ambitious vision, implement timely policy frameworks, and pursue proactive public sector deployment. Given the pace of policy changes and innovation internationally, the time to act is now.”
AFME’s paper outlines a three-pronged strategy to secure UK leadership in DLT-based markets:
- Clear, consistent, and timely policy frameworks to enable DLT adoption across capital market participants.
- Regulatory and legal frameworks to enhance the UK’s attractiveness as a global hub for DLT-based asset and crypto asset trading.
- Proactive public sector deployment of DLT, including DIGIT’s delivery, cash settlement solutions, and enabling corporate access to digital finance.
DLT adoption promises far-reaching benefits, from faster, safer settlement and greater market access for investors and corporates, to spillover effects into the wider UK economy, supporting innovation and economic growth. AFME stresses that without immediate action, the UK risks losing its competitive edge in international capital markets.
AFME is calling on the UK Government, regulators, and market participants to adopt this vision and implement decisive measures to ensure the UK capital markets remain globally pre-eminent and at the forefront of DLT-based innovation.
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