Bonds and repo lead tokenisation shift as equities lag behind

A new report from capital-markets consultancy GreySpark Partners argues that institutional use of distributed ledger technology (DLT) — the shared, tamper-resistant record-keeping systems behind tokenised assets — has stopped being a series of experiments and started producing real trading volume. But the shift is uneven. GreySpark, in "Trends in Digital Assets in EU and UK 2026", published on 24 September 2026, puts fixed income and repo (short-term borrowing secured against bonds or other securities) ahead of the pack, with foreign exchange also showing institutional activity. Tokenised equities, by contrast, remain marginal.

That matters for British readers because the UK is simultaneously building two separate rulebooks that will reshape how banks, trading venues and settlement providers may handle these instruments. A new Financial Conduct Authority (FCA) cryptoasset and stablecoin regime commences on 25 October 2027. A different framework, the Digital Securities Sandbox (DSS), run jointly by the Bank of England and the FCA, already governs live trials of tokenised conventional securities such as bonds, money-market instruments and shares. Conflating the two risks misreading what actually changes, and when.

GreySpark's own report illustrates why caution is needed: its public summary appears to misstate a well-documented US repo figure. Its €4.8bn fixed-income total is dated to calendar year 2025 but discloses no issue list or methodology, while its US$115tn equity-market comparator and its US$300bn stablecoin-market figure carry no disclosed observation date, dataset or provider on the public page. The underlying evidence is instructive, but it does not yet show the UK itself moving broadly into production.

What "live" actually means

Reports on tokenisation often blur several distinct stages: a proof of concept that never reaches real money; a regulatory sandbox entrant that has permission but has not yet transacted; a one-off pilot issuance; and recurring production volume on a live platform. The UK's own Digital Securities Sandbox makes the distinction explicit through its gated structure. Gate 1 approval alone does not permit live activity. Gate 2, reached via a Sandbox Approval Notice, can allow specified live activity — but that is not the same as evidence that transactions have actually occurred. As of the most recent dashboard update, two firms had reached Gate 2, and none had yet reached go-live.

Fixed income leads, but from a small base

GreySpark states that distributed-ledger bond issuance reached €4.8bn during 2025. The figure sits on the report's public page without a disclosed issue list or methodology, so it should be read as GreySpark's estimate rather than an independently verified market total. The consultancy also names a HK$12bn Hong Kong Mortgage Corporation digital bond as the largest to date, a claim that would need confirmation from the restricted report or issuer documentation.

Independent evidence points the same general direction without matching GreySpark's precise figures. The Bank for International Settlements (BIS), in its 2025 Annual Economic Report, counted more than 20 tokenised supranational, sovereign and agency bonds worth an aggregate of over US$4bn across nine currencies — while explicitly describing the market as experimental rather than mature. BIS also found that early tokenised bonds showed costs and liquidity broadly similar to conventional bonds, which cuts against any claim that tokenisation has already delivered broad, market-wide efficiency gains.

The UK's own flagship fixed-income pilot remains just that — a pilot. HM Treasury expects the first transaction on its Digital Gilt Instrument (DIGIT), issued on the HSBC Orion platform, by the first quarter of 2027. The pilot is separate from the government's conventional debt-issuance programme, and its size and exact date had not been announced as of this report; whether repeat issuance follows is a separate question.

Repo is the clearest production case — and GreySpark gets its own example wrong

The strongest evidence of genuine production-scale activity concerns repo. Broadridge Financial Solutions said its Distributed Ledger Repo platform processed an average of US$384bn of transactions per day in December 2025 — up 490% year on year and 4% on November 2025 — with total volume for the month reaching nearly US$9tn. That is a US company platform, reported by the company itself and not independently audited in the material reviewed for this article, but it is the clearest sign among the evidence reviewed here that institutional DLT use has moved beyond trials in at least one market segment.

GreySpark's own public report page describes the same episode differently, saying Broadridge processed "around USD 384 billion in December 2025 alone". That wording conflates a daily average with a monthly total. Broadridge's own release is explicit that US$384bn was the average per day, and that nearly US$9tn was the figure for the whole month. Readers relying on GreySpark's public page alone would understate Broadridge's reported volume by more than twentyfold.

The missing evidence on foreign exchange

GreySpark groups foreign exchange with repo as an area where distributed-ledger use has moved into real institutional volume. Its public page does not, however, supply a transaction value, a named venue, a period, or confirmation that any system is running in production rather than trial. The one comparable public example identified for this article, the BIS Innovation Hub's Project Rialto, combined a foreign-exchange mechanism with instant-payment systems and tokenised central-bank money — but as a proof of concept using simulated transactions, not a live production system. On the evidence available, GreySpark's foreign-exchange claim should be treated as asserted rather than demonstrated.

Why equities lag

GreySpark characterises tokenised equities as negligible against a US$115tn conventional equity market, again without stating the date, geography or dataset behind that comparator. The direction is nonetheless supported elsewhere. The European Securities and Markets Authority (ESMA), reviewing the EU's DLT Pilot Regime — an EU framework, not a UK one — reported in June 2025 that recorded activity included just six DLT share issues worth a combined €11,917,753, alongside one €401 debt issue and one debt issue authorised for up to US$500m. Whatever the true scale of global tokenised equity activity, the closest comparable regulatory dataset available shows it as vanishingly small next to conventional equity markets.

Part of the reason may be structural. ESMA's own commentary notes that synthetic stock tokens can offer economic exposure without conveying the underlying legal rights of a share, such as voting or the direct claim recognised in a shareholder register — a distinction a reader should not gloss over when a product is marketed as a "tokenised share".

Two different UK rulebooks, not one

It is tempting to read the 25 October 2027 date as the moment tokenisation becomes fully regulated in the UK. It is not. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, made on 4 February 2026, principally come into force on 25 October 2027 and create a new FCA perimeter for activities including issuing qualifying stablecoins, operating cryptoasset trading platforms, dealing, arranging deals, safeguarding cryptoassets, and arranging cryptoasset staking, subject to statutory definitions and exclusions. A tokenised bond or equity that remains, in substance, a conventional regulated financial instrument does not automatically fall inside this cryptoasset perimeter simply because it sits on a ledger.

Infrastructure for tokenised conventional securities — trading venues, notary functions, maintenance and settlement for bonds, money-market instruments, asset-backed securities and shares — is instead addressed through the Digital Securities Sandbox, a joint Bank of England–FCA framework scheduled to run until January 2029, with a permanent successor regime still being shaped.

The sandbox's aggregate capacity ranges — £8bn to £13.1bn of UK government debt, £17bn to £28bn of sterling corporate bonds, £8bn to £16bn of asset-backed securities, £4.4bn to £8.8bn of short-term money-market instruments, and up to 6% of outstanding shares for each FTSE 350 company — are risk-control ceilings set by the Bank, not records of actual issuance or trading. HSBC Bank plc reached Gate 2 on 13 July 2026 and ClearToken CSD Limited on 18 September 2026; as of 21 September 2026 neither is recorded as having reached go-live. HM Treasury's own Wholesale Digital Markets Champion assessment, dated to 1 July 2026, said commercial deployment of digital wholesale financial assets in the UK remained limited at that point — a useful check on any assumption that global repo-scale activity translates directly into UK market practice.

What changes on 25 October 2027

From that date, the FCA will apply conduct, prudential, safeguarding, operational-resilience, financial-crime and senior-management requirements to firms performing the newly regulated activities set out above, calibrated to the activity and firm concerned. HM Treasury's own impact assessment estimates an equivalent annual direct cost to business of £2.7m from the regulations, and a present-value net cost to business of £24.02m over its ten-year appraisal period.

A bank planning any of these activities needs to work out whether its existing FCA permission covers it or whether it needs a variation. That assessment is activity-specific: a bank is not automatically brought inside the new perimeter merely because it uses distributed ledger technology somewhere in its operations, and it is not automatically exempt because it already holds Part 4A permission. The practical mechanism for sorting this out is the dedicated application window, open from 30 September 2026 to 28 February 2027, ahead of the 25 October 2027 commencement date.

Where the Bank of England fits in

If HM Treasury recognises a stablecoin issuer as systemic, the Bank of England and the FCA will regulate it jointly. The Bank's systemic-stablecoin work is aimed principally at sterling-denominated stablecoins used within systemic payment systems, not at stablecoins used solely for cryptoasset trading. As of 27 September 2026, though, the Bank's Code of Practice for systemic sterling stablecoins remained in draft; the Bank had said it intended to finalise it by the end of 2026. That leaves a live asymmetry for firms to plan around: the FCA's cryptoasset rulebook is final, while the Bank's systemic-stablecoin rules are not.

Separately, within the DSS, the Bank permits applications to use qualifying stablecoins as settlement assets on a case-by-case basis, subject to minimum requirements covering universal redemption, 1:1 backing, safeguarding, insolvency claims and operational resilience.

UK versus EU: permission is not the same as adoption

The EU's own experience is a reality check on how far regulatory permission alone carries a market. ESMA's June 2025 review of the EU DLT Pilot Regime — again, EU law that does not apply in the UK — found only three infrastructures held specific permissions. ESMA itself described uptake as initially limited despite growing interest, and pointed to continuing constraints around legal certainty, cash settlement and interoperability between systems — the same structural questions the UK's own DSS guidance flags as barriers to wider adoption.

What to watch next

The clearest markers of genuine deployment, rather than announced intent, will be: the Bank of England's finalised systemic-stablecoin Code of Practice, expected by the end of 2026; an entrant reported at go-live status on the DSS dashboard, which had not appeared as of 21 September 2026; the first DIGIT transaction, targeted for the first quarter of 2027, and whether repeat issuance follows; named, verifiable foreign-exchange platform volumes to test GreySpark's claim; and how applications submitted in the window to 28 February 2027 translate into firms actually live under the new cryptoasset regime after 25 October 2027. Official detail on the cryptoasset regime sits with the FCA; detail on the sandbox and systemic stablecoins sits with the Bank of England.