Economic Secretary to the Treasury Delivers Keynote Address at UK Finance Event

Thank you, Bob, and to UK Finance for facilitating our gathering today. I also appreciate the warm invitation to be here.

As many of you are aware, I have recently stepped away from my role as City Minister. It would be a stretch to describe my time as Chief Secretary as a holiday—I have certainly enjoyed more leisurely breaks—but it is truly wonderful to return and to support the financial services sector in its vital contribution to growth and prosperity across the nation.

I am delighted to observe that during my absence, the agendas of digitalisation and tokenisation have gained remarkable momentum. This is an area I am particularly keen to advance now that I have resumed my responsibilities.

We are accustomed to waves of technological advancements that enhance our daily lives, introducing new products—both physical and digital—and ensuring that we reap the benefits of innovative services. However, there are pivotal moments in economic history when technology profoundly alters the very infrastructure of an economy. The transition from paper to electronic trading in the 1980s and 1990s was one such transformation, fundamentally changing our financial markets. I believe we are witnessing a similar transition today, as we move from electronic to digital frameworks.

Launching a New Era for Digitalisation

It is a pleasure to stand before you as UK Finance unveils this report. This document, which builds upon the Digital Wholesale Champion’s report released in July, conveys a vital message for our sector: digitalisation is no longer a marginal topic; it has firmly entered the mainstream discourse.

This development is significant as it presents substantial opportunities not only for the City and the broader financial services sector but for the entire UK economy as well.

Today, I wish to convey a decisive message: the digitalisation of wholesale financial markets has become a national priority. This initiative necessitates collaboration among industry leaders, government, and regulators.

To sustain and enhance our global competitiveness within an increasingly crowded landscape, the government must create conducive conditions and advocate for the UK’s interests. Regulators can offer clarity. However, it is the industry—comprising market participants like yourselves—that must innovate, compete, and forge new pathways to drive progress.

That is why the contributions of organisations such as UK Finance are invaluable, and I wholeheartedly endorse the findings of today’s report.

Embracing the Future of Tokenisation

A consensus is emerging as I engage with businesses across the sector: the discussion is no longer centred around whether wholesale markets will become tokenised; it revolves around when that will occur. It is imperative that the UK acts swiftly to position itself as a leader in this global transition, and I am confident that we can achieve this.

The year 2026 has already proven to be pivotal for progress. Notably, we have received the inaugural report from the UK’s Wholesale Digital Markets Champion, Chris Woolard. This document outlines an industry-led roadmap to expedite the digitalisation of UK wholesale financial markets, identifies priority use cases, and highlights the practical challenges that need addressing for digital markets to reach scale.

Additionally, it has established nine industry action groups, and I eagerly await the announcement of their composition. I am encouraged by the diversity of firms participating—ranging from new entrants to established players, all contributing valuable insights.

Overcoming Coordination Challenges

The success of this initiative hinges not on the technology itself—much of which is already available—but on our ability to coordinate effectively. We must address several critical questions: How can firms collaborate? How do platforms engage with one another? How can we ensure interoperability? How do we establish liquidity? What common standards can we create to ensure the UK leads the global conversation? Lastly, how can we instil sufficient confidence for markets to transition from pilot projects to full-scale operations?

These questions underscore the importance of our work. Furthermore, it falls to the government and regulators to consider how we can ensure that regulations effectively accommodate the digitalisation process.

Innovative Solutions for the Digital Market

Regulation is frequently critiqued for its sluggishness in adapting to rapid technological changes. We are committed to addressing this challenge.

As you may know, we have introduced the Digital Securities Sandbox, which, as highlighted in UK Finance’s report, provides a flexible mechanism for amending UK legislation to enable firms to bring innovative digital solutions to market. Currently, 16 firms are involved, with the first firm recently granted approval to commence live activities, and we anticipate further live activities in the near future.

Moreover, we recognise there is more to accomplish to ensure that the UK legal framework remains supportive of digital initiatives beyond the sandbox. We will actively engage with the sector to outline necessary changes and the strategy for implementation, including leveraging existing legislative tools.

Progressing Towards a Digital Future

All of this builds upon our ongoing efforts as a government to support digitalisation. This year, we have also made strides on the Digital Gilt Instrument, DIGIT, which will be crucial in laying the groundwork for a broader digital market ecosystem. We expect DIGIT to be issued in the first quarter of 2027, with plans for potential further issuances contingent on the success of the initial transaction.

Additionally, we are advancing the modernisation of the UK’s payments ecosystem, which includes infrastructure upgrades and regulatory reforms to accommodate stablecoins, tokenised deposits, and the next generation of digital settlements.

I would like to acknowledge the efforts of UK banks in advancing the Great British Tokenised Deposit initiative, which aims to introduce tokenised sterling deposits to the UK market. This initiative complements the government and regulators’ efforts to establish a regulatory framework for stablecoins, thereby providing payment solutions for a truly digital marketplace.

As we navigate these developments, we are entering a critical period of delivery this autumn. Let us continue to collaborate, whether through the leadership demonstrated by UK Finance, the drive of Chris Woolard and the Wholesale Digital Markets Champion Taskforce, the Digital Securities Sandbox, or DIGIT. Each aspect represents a facet of the broader narrative—a narrative of a sector and a city committed to innovation, driven by pride and ambition to lead. It is a narrative of a nation choosing to modernise, with a shared purpose to ensure that the markets of the future are built right here in the United Kingdom.

Thank you.