Tokenisation Standards Urged by FIX Amid Wider Adoption Hopes

The FIX Trading Community has called for greater standardisation of tokenised assets to ensure wider adoption in global markets. The industry association made this comment in its response to a joint consultation by the Financial Conduct Authority and the Bank of England on the future of tokenisation in UK wholesale markets.

According to Jim Kaye, Executive Director at FIX, the main barrier to wider adoption is not the technology but gaps in data standards, reconciliation, and market processes. The 'lack of common data standards' could continue to hamper adoption, particularly in areas such as chain-to-chain connectivity and digital asset settlement instructions.

Several financial firms are already testing tokenised securities and related infrastructure. Robinhood has launched over 200 tokenised stocks for European customers, while eToro plans to tokenise US-listed equities, initially targeting 100 of its most popular stocks. CMC Markets recently tested a tokenised share transaction in the UK.

FIX has published guidance on using its protocol for tokenised assets and released Recommended Practices for Digital Asset Trading in 2022. The association believes that a framework requiring input from both market participants and regulators is necessary to limit regulatory arbitrage.