Wholesale Financial Markets Digital Strategy · first published 15 July 2025
This strategy sets out how the UK government plans to modernise wholesale financial markets (the large-scale markets where institutions trade securities, currencies and other financial instruments). It covers three areas: optimising existing markets by removing paper and manual processes; transforming markets using technologies like Distributed Ledger Technology (DLT — a system where records are shared across multiple parties simultaneously, as in blockchain), artificial intelligence (AI), and quantum computing; and building international leadership. This is not a procurement policy note and does not directly change how public contracts are awarded. However, it signals substantial government-backed investment and regulatory activity in fintech, regtech, and financial infrastructure — meaning technology SMEs (small and medium-sized enterprises) in these spaces may find significant commercial pipeline opening up in financial services and adjacent public-sector work. Key concrete commitments include moving to T+1 (next-day) securities settlement by October 2027, removing paper share certificates, issuing a Digital Gilt Instrument (DIGIT) on DLT, and running a Digital Securities Sandbox. The strategy is directed at industry and regulators, not at public procurement specifically.
WHO THIS APPLIES TO
THE ENKII VIEW
For SMEs building fintech, regtech, data, AI, or DLT products, this strategy functions as a demand signal: government and large financial institutions are being pushed to procure and adopt digital solutions across payments, settlement, clearing, reporting, and identity — and sandboxes like the Digital Securities Sandbox and the FCA's Supercharged Sandbox are explicit on-ramps for smaller innovators to participate in live market activity. The appointment of a Digital Markets Champion to coordinate cross-sector digitalisation is a practical networking and lobbying point for SMEs seeking to join consortia or get visibility. SMEs that can demonstrate smart data principles, DLT capability, or AI tooling for wholesale markets should position now, as the strategy explicitly calls for cross-sector coalitions and private-sector-led solutions.
1. Apply to participate in the Digital Securities Sandbox now — the strategy explicitly names it as the vehicle for testing live digital asset trading, settlement, and payment solutions including stablecoins and tokenised deposits.
SMEs building DLT, tokenisation, or digital asset infrastructure products — The document commits to 'Enabling the sector to test, scale and roll out solutions that tokenise financial assets' through the Digital Securities Sandbox, and to making successful regulatory changes permanent quickly.
2. Investigate the FCA's Supercharged Sandbox as a route to test and demonstrate your AI product in a live regulatory environment — the strategy explicitly names it as the mechanism for AI testing.
SMEs with AI products applicable to wholesale financial markets — The document commits to 'Facilitate the testing, and access to leading AI products, through initiatives such as the FCA's Supercharged Sandbox.'
3. Position your product or proposal around the government's 'smart data principles' (relevant, timely, well-structured, trusted, interoperable) and engage with the sector consultation on Digital Identity for wholesale markets.
SMEs offering data management, data standards, or digital identity solutions — The strategy commits to 'Driving forward the adoption smart data principles across UK wholesale markets' and to 'Working with the private sector to explore how Digital Identity could be adopted in wholesale markets and what the best use cases are.'
4. Prepare your systems and clients for phased share dematerialisation — paper share certificates are being removed in phases via regulation and legislation; firms that can offer digital alternatives early will be ahead of the curve.
SMEs providing share registry, transfer agent, or securities administration services — The document commits to 'Driving forward share dematerialisation, to be delivered in phases as set out in the final recommendations of the Digitisation Taskforce' using 'regulation and legislation where necessary.'
5. Build T+1 settlement capability into your product roadmap with a target of October 2027 — this is a firm government commitment requiring significant automation across the industry.
SMEs in securities operations, post-trade technology, or settlement automation — The government 'committed to introducing a next day T+1 securities settlement cycle in October 2027' and is focused on identifying and prioritising 'key areas for further automation.'
6. Monitor the appointment of the Digital Markets Champion and engage with that office once established — it is explicitly tasked with coordinating cross-sector coalitions and connecting UK firms with international digitalisation efforts.
All SMEs in fintech, regtech, or financial infrastructure — The strategy commits to 'Appointing an industry expert as Digital Markets Champion, who will provide leadership from, and for, the sector on wholesale market digitalisation and join up work in the UK sector with other jurisdictions.'
7. Note that English and Welsh law is explicitly stated to broadly accommodate tokenised assets already — use this in client conversations and contracts to reduce perceived legal risk; seek HM Treasury clarification on any specific edge cases.
SMEs building products on DLT governed by English law — The document states that 'English and Welsh law, and UK financial services legislation, is flexible and broad enough to accommodate digital assets' and that the government will 'providing further clarity in any specific cases where this is needed.'
Every rule below quotes the official document verbatim.
The government has committed to introducing a next-day (T+1) securities settlement cycle in October 2027. (UK wholesale securities markets; all participants in securities settlement)
“the government committed to introducing a next day T+1 securities settlement cycle in October 2027, following the final report of the Accelerated Settlement Taskforce”
The strategy covers three broad areas: market optimisation, market transformation, and market leadership. (UK wholesale financial markets — all participants)
“The UK will drive forward the digitalisation of its wholesale financial markets across three broad areas: 1) Market optimisation... 2) Market transformation... 3) Market leadership”
The government commits to removing paper from UK wholesale markets, including paper share certificates, using regulation and legislation where necessary. (UK wholesale financial markets — all participants, all asset classes)
“Removing paper from UK wholesale markets, utilising regulation and legislation where necessary to achieve this.”
Share dematerialisation will be delivered in phases following the Digitisation Taskforce's final recommendations. (UK equity markets and share certificate holders/issuers)
“Driving forward share dematerialisation, to be delivered in phases as set out in the final recommendations of the Digitisation Taskforce, in order to enhance efficiency while protecting the interests of investors.”
The government commits to adopting smart data principles across UK wholesale markets to ensure data is shared, reported and utilised effectively. (UK wholesale financial markets — all participants)
“Driving forward the adoption smart data principles across UK wholesale markets, to ensure wholesale market data is shared, reported and utilised effectively.”
The Digital Securities Sandbox will be used to test stablecoins and other digital payment solutions alongside digital asset trading and settlement. (Firms with stablecoin, tokenised deposit, or digital payment products seeking sandbox participation)
“The regulators will explore how stablecoins can be utilised in the new Digital Securities Sandbox alongside other digital payment solutions.”
The government will take forward the issuance of the Digital Gilt Instrument (DIGIT), designed to settle on DLT and support interoperability between different infrastructure. (DLT infrastructure providers and financial market participants)
“the first issuance of the Digital Gilt Instrument (DIGIT)... include facilitating the settlement of DIGIT on DLT, supporting interoperability between different infrastructure and working with the sector to encourage the development of collateral mobility solutions and secondary markets in the future.”
The FCA's (Financial Conduct Authority's) Supercharged Sandbox will be used to facilitate testing and access to leading AI products. (AI solution providers targeting wholesale financial markets)
“Facilitate the testing, and access to leading AI products, through initiatives such as the FCA's Supercharged Sandbox.”
The government will appoint an industry expert as Digital Markets Champion to coordinate private-sector digitalisation work and connect UK efforts with international jurisdictions. (All wholesale financial market participants; relevant to SMEs seeking sector coordination and coalition opportunities)
“Appointing an industry expert as Digital Markets Champion, who will provide leadership from, and for, the sector on wholesale market digitalisation and join up work in the UK sector with other jurisdictions.”
English and Welsh law is stated to broadly accommodate digital and tokenised assets already, with the government committing to provide further legal clarity where specific cases require it. (All firms issuing or transacting in tokenised assets governed by English and Welsh law)
“English and Welsh law, and UK financial services legislation, is flexible and broad enough to accommodate digital assets... We will work with the sector and commit to providing further clarity in any specific cases where this is needed.”
The Private Intermittent Securities and Capital Exchange System (PISCES) is identified as a Financial Market Infrastructure Sandbox supporting trading and settlement innovation. (Firms building or participating in trading and settlement infrastructure for digital or private assets)
“The use of Financial Market Infrastructure Sandboxes, such as the Digital Securities Sandbox and the Private Intermittent Securities and Capital Exchange System (PISCES), will ensure legislation and regulation can evolve as innovation takes place”
The government is open to proposals for digital wholesale payments including tokenised deposits and stablecoins, and also to solutions that decentralise functions currently performed by centralised entities. (Fintech and infrastructure firms across payments, trading, clearing, settlement and reporting)
“The UK should be open to completely new models across the various wholesale market activities, including payments, trading, clearing, settlement and reporting. It should be open to different technological solutions, including solutions that decentralise functions currently performed by centralised entities.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.