The UK’s asset management sector takes a significant leap forward as the FCA approves new rules enabling fully tokenised funds, with Legal & General swiftly deploying blockchain-based liquidity products amid rising industry momentum.
The UK’s push into fund tokenisation has taken a decisive step forward after the Financial Conduct Authority set out its most substantial guidance yet on how authorised funds can use distributed ledger technology within the existing rulebook. In a policy statement published on 30 April, the regulator confirmed final rules that allow fund managers to run registers on-chain under the industry’s “Blueprint” model and introduced an optional direct-to-fund dealing route, giving investors the ability to transact directly with a fund whether it is traditional or tokenised.
The FCA said the changes were designed to make dealing in funds more efficient and accessible, while keeping the regime predictable and proportionate. The guidance took effect immediately, signalling that the regulator now sees tokenisation less as a theoretical experiment than as an implementable market structure.
Legal & General Asset Management moved quickly to test that framework. The firm said its suite of liquidity funds is now live on Calastone’s Tokenised Distribution Network, which uses blockchain-enabled infrastructure to connect conventional fund products with digital distribution channels. According to the company, the system handles token creation, order routing, trade aggregation, reconciliation and on-chain settlement, while still fitting into existing fund administration processes.
The deployment is being portrayed as one of the most significant early moves by a major UK asset manager into tokenised money market products. One report said the funds, covering US dollar, euro and sterling share classes, went live in mid-April and are backed by short-term instruments such as government debt, bank deposits and corporate paper.
The broader significance is hard to miss. The FCA said the UK now manages £16.5 trillion in assets, second only to the US, underscoring the scale of the opportunity if tokenised funds become mainstream. PwC UK said the new framework should help firms improve efficiency, widen distribution and bring more investors into regulated products without abandoning familiar safeguards.
Calastone has argued that the market is moving in phases, beginning with a baseline infrastructure model that firms can adopt now before more advanced use cases emerge. For the UK, the question is no longer whether tokenised funds will arrive, but how quickly its asset managers can turn a newly permissive framework into a competitive advantage.
- https://digitalbytes.substack.com/p/digital-bytes-6th-may-2026 – Please view link – unable to able to access data
- https://www.fca.org.uk/news/press-releases/fca-sets-out-guidance-support-innovation-fund-tokenisation – The Financial Conduct Authority (FCA) has published guidance to support innovation in fund tokenisation, enabling asset managers to use distributed ledger technology (DLT) within existing regulations. This includes an optional Direct to Fund (D2F) model, allowing investors to deal directly with the fund, whether traditional or tokenised. Tokenisation represents an asset or ownership using DLT, potentially lowering costs and broadening investment opportunities. The FCA collaborated with the industry to develop this framework, aiming to make fund dealing more efficient and accessible. The guidance is effective immediately, with the UK managing £16.5 trillion in assets, second only to the US.
- https://group.legalandgeneral.com/en/newsroom/press-releases/l-g-liquidity-funds-now-live-on-ss-c-s-calastone-tokenised-distribution-network – Legal & General Asset Management (L&G) has launched its suite of liquidity funds on the Calastone Tokenised Distribution (CTD) Network, marking a significant step in L&G’s digital distribution strategy. The CTD Network connects traditional fund products with digital distribution channels, enabling investors to access L&G’s liquidity strategies in tokenised form via blockchain-enabled infrastructure. Calastone provides the underlying technology for token creation, order routing, trade aggregation, reconciliation, and on-chain settlement, integrating seamlessly with existing fund administration processes. This approach allows L&G to expand distribution reach while maintaining operational efficiency in a secure environment, continuing to provide strong service to investors.
- https://www.fca.org.uk/publications/policy-statements/ps26-7-progressing-fund-tokenisation – The FCA has finalised its guidance on progressing fund tokenisation and introduced new rules on direct-to-fund dealing. This policy statement outlines how authorised fund managers can employ distributed ledger technology (DLT) within the current framework, including the use of the industry-led Blueprint model for tokenised funds and more advanced use-cases. Tokenisation represents an asset or ownership using DLT, potentially lowering costs and opening up investment opportunities to a wider audience. The new rules and guidance take effect immediately, aiming to support innovation in UK asset management and embrace new technology while being predictable and proportionate.
- https://www.pwc.co.uk/industries/financial-services/understanding-regulatory-developments/fca-sets-framework-for-tokenised-authorised-funds.html – PwC UK discusses the FCA’s Policy Statement on tokenised funds, published on 30 April 2026, confirming final rules and guidance to support authorised funds using distributed ledger technology (DLT). The framework allows firms to operate fund registers on-chain under the existing ‘Blueprint’ model and introduces an optional direct dealing model to improve efficiency and enable tokenisation. The framework takes effect immediately, aiming to accelerate the tokenisation of authorised funds and enhance distribution, improve efficiency, and broaden access within a controlled, regulated framework.
- https://www.calastone.com/insights/a-blueprint-and-breakthrough-for-uk-fund-tokenisation/ – Calastone’s Chief Technology Officer, Adam Belding, discusses the Investment Association’s report, ‘UK Fund Tokenisation: A Blueprint for Implementation,’ marking a key milestone in applying tokenisation and distributed ledger technology (DLT) to the UK’s funds industry. The report outlines a phased approach to fund tokenisation, starting with a baseline model that establishes the infrastructure for fund tokenisation in the UK funds market, usable within the existing legal and regulatory framework. This approach allows firms to pilot technological change now before tackling more complex approaches and use cases in future phases.
- https://blockchain.news/news/legal-general-50b-liquidity-funds-tokenized-calastone-network – Legal & General Asset Management has tokenised £50 billion worth of liquidity funds through Calastone’s blockchain distribution network, marking one of the largest traditional asset manager moves into tokenised money markets. The funds went live on April 15, 2026, with initial deployment on Ethereum and EVM-compatible chains. The tokenised share classes cover funds denominated in US dollars, euros, and British pounds—all designed for capital preservation with same-day liquidity. They invest in short-term money market instruments including government bonds, bank deposits, and corporate debt.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references the FCA’s policy statement published on 30 April 2026 and Legal & General’s announcement on 14 April 2026. ([fca.org.uk](https://www.fca.org.uk/news/press-releases/fca-sets-out-guidance-support-innovation-fund-tokenisation?utm_source=openai)) The content appears current and original, with no evidence of recycling or republishing from low-quality sites. However, the article’s publication date of 6 May 2026 is a week after the FCA’s announcement, which may slightly reduce its freshness score.
Quotes check
Score:
7
Notes:
The article includes direct quotes from Simon Walls, executive director of markets at the FCA, and Ross McDonald, Liquidity Investment Specialist at L&G. ([fca.org.uk](https://www.fca.org.uk/news/press-releases/fca-sets-out-guidance-support-innovation-fund-tokenisation?utm_source=openai)) Searches for these quotes did not yield earlier appearances, suggesting they are original. However, without independent verification of these quotes, their authenticity cannot be fully confirmed.
Source reliability
Score:
6
Notes:
The article is published on Substack by Jonny Fry, a known figure in the blockchain and digital asset sectors. While Substack allows for direct publication, the platform’s lack of editorial oversight may affect the reliability of the content. The article cites reputable sources, including the FCA and L&G, but the overall source reliability is moderate due to the platform’s nature.
Plausibility check
Score:
9
Notes:
The claims about the FCA’s guidance on fund tokenisation and L&G’s adoption of Calastone’s Tokenised Distribution Network are plausible and align with recent industry developments. ([fca.org.uk](https://www.fca.org.uk/news/press-releases/fca-sets-out-guidance-support-innovation-fund-tokenisation?utm_source=openai)) The article’s tone and language are consistent with industry reporting, and there are no signs of excessive detail or off-topic content. However, the lack of independent verification of the quotes slightly reduces the score.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article provides a timely and plausible summary of recent developments in fund tokenisation, citing reputable sources. However, the lack of independent verification of the quotes and the publication platform’s nature slightly reduce the overall confidence in the content’s reliability. Editors should exercise caution and consider seeking additional verification before publication.