The publication of the HM Treasury’s Wholesale Digital Markets Champion’s first report is an important moment for the UK’s capital markets. It sets out a clear, practical and ambitious direction for tokenised wholesale markets, including repurchase agreements (repo), and it does so with the right emphasis: from ambition to action and delivery.
As a member of the Industry Taskforce, Tokenovate welcomes the report and strongly supports its central message. The UK has the legal foundations, market depth, regulatory experience and institutional credibility to play a leading role in the next generation of digital capital markets. The opportunity now is to turn these strengths into a coordinated operating model that firms can invest behind.
The report makes it clear that tokenised markets are now moving from experimentation towards live deployment, with significant potential benefits for efficiency, liquidity, collateral mobility, risk management and international competitiveness. It also recognises that the UK’s role is not guaranteed. In a network-driven market, activity, liquidity and standards will form where the operating environment is clearest and most usable.
The report’s emphasis on practical action is spot on. It calls for the UK to move from pilots to production, from ambition to delivery, and from participation to leadership. This is closely aligned with Tokenovate’s view of what the market now needs.
A coherent roadmap for digital capital markets
Tokenovate has long argued that London and the UK should aim to become the trusted operating venue for digital capital markets. That means connecting the UK’s strong but currently separate initiatives into one coherent programme: the Digital Securities Sandbox (DSS), DIGIT, the Bank of England Synchronisation Lab, the emerging cryptoasset and stablecoin regime, wholesale market reform and the wider paperless markets agenda.
The report takes a similar approach. It recognises that the next challenge is to turn individual initiatives into a broad strategic programme for tokenised wholesale markets. It also proposes a delivery architecture built around action groups, with a practical focus on end-to-end use cases, starting with repo.
We believe this is the right direction. Scaling tokenised markets need clear routes to production, common standards, consistent legal treatment and infrastructure that supports real market activity across issuance, trading, collateral, reporting and settlement.
DIGIT is a powerful national signal
The report rightly identifies DIGIT as a major opportunity for the UK. A digital gilt can be a powerful national signal, but its real value will come from the market infrastructure it helps build around it. Issuance alone is not enough.
DIGIT should help demonstrate how a digital sovereign instrument can trade in secondary markets, support repo, move as collateral, connect to cash settlement and attract institutional liquidity. That requires a post-trade and settlement workstream from the outset, covering lifecycle data, settlement instructions, custody, reporting, collateral eligibility and interoperability across market participants.
This is where standards become essential. Without a consistent semantic layer, tokenised assets risk becoming another source of fragmentation. The report recognises this, calling for shared token standards, common APIs and data models, including through the FINOS Common Domain Model (CDM), to support interoperability.
Tokenovate strongly supports this approach. CDM can provide the common language for financial instruments, lifecycle events and settlement instructions across custodians, asset managers, banks, trading venues and market infrastructures.
Repo and collateral mobility are the right first use cases
The report’s focus on repo is also crucial. Repo is foundational to liquidity, collateral mobility and secondary market development. If tokenisation is to deliver meaningful market benefit, it must support financing, collateral reuse, risk management and settlement certainty.
The report calls for an end-to-end repo use case, supported by action groups covering secondary markets, collateral, prudential standards, FMI infrastructure and the cash leg. It also highlights the need for tokenised collateral to support the development of tokenised markets.
This directly aligns with Tokenovate’s work. Our platform is designed to automate post-trade workflows using trusted standards, including ISDA, ICMA, ISLA, The IA and CDM. We help firms turn trade data, legal terms and lifecycle events into deterministic workflows that can support matching, lifecycle processing, collateral movement, reporting and settlement readiness.
To be truly successful, a tokenised repo market needs accurate trade data, consistent lifecycle state, rules-based execution, settlement instructions, collateral eligibility, cash leg coordination and auditability across multiple participants.
One market, multiple rails
The report is right to focus on interoperability. It notes that tokenised markets risk forming “walled gardens” unless connectivity is underpinned by common specifications and rules. It also recognises that where shared industry standards are not possible, interoperability layers and orchestrators will be needed to allow DLT-based ledgers to interact with existing settlement infrastructure and each other. Tokenovate’s view is that the challenge extends beyond blockchain interoperability to market interoperability.
Financial instruments, rights, obligations, lifecycle events, risk controls and settlement processes are becoming increasingly codified. The real task is to ensure these can operate consistently across traditional systems, custodians, CSDs, payment rails, tokenised deposits, stablecoins, RTGS synchronisation and emerging DLT networks.
Tokenovate’s role is to provide the standards-native orchestration layer for that environment. Through our Data Normalisation and Unified Trade Record, Workflows as a Service and Novat settlement protocol, we help market participants coordinate post-trade activity across multiple systems and settlement rails while preserving legal and operational integrity.
Legal certainty must become operational certainty
The UK already has a strong legal foundation for digital markets. The report recognises this and calls for industry to develop best practice frameworks, promote the adaptability of English law and identify practical blockers that need to be addressed. It also highlights areas requiring further clarity, including collateral treatment, settlement finality, custody and stablecoin policy.
This distinction is important. Legal certainty is necessary, but it must be translated into operational certainty. Firms need to know how rights, obligations, title, control, custody, lifecycle events and settlement outcomes are represented and processed in real workflows.
That is where data standards and workflow automation become critical. The UK’s legal advantages can become an exportable market capability if they are connected to common data models, conformance testing, rules-based orchestration and live post-trade adoption.
A supportive step forward
We welcome the Digital Markets Champion report and support its ambition. It reflects many of the priorities Tokenovate has advocated: a coherent national roadmap, practical end-to-end use cases, secondary market and post-trade adoption, DIGIT as a market-building catalyst, CDM-based interoperability, legal certainty, tokenised collateral and settlement across multiple forms of money.
Tokenovate looks forward to contributing to that work and helping make the UK the trusted, safe operating venue for digital capital markets.