Tokenized funds continue to expand across markets and blockchains, but fragmented liquidity still hinders institutional adoption. In the UK, the FCA and the Bank of England are progressing toward permanent financial infrastructure with the Digital Securities Sandbox, featuring key players such as HSBC, Euroclear, and LSEG. The regulatory framework will expand settlement assets eligible as stablecoins and develop synchronization infrastructure by 2028 to connect tokenized ledgers with existing payment systems. This approach prioritizes transaction efficiency, reduces risks associated with using tokens as collateral, and encourages institutional adoption rather than creating speculative opportunities. Despite these advances, liquidity fragmentation remains a major obstacle to institutional utility.
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