Economic Secretary to the Treasury speech at UK Finance

The Economic Secretary to the Treasury yesterday delivered her speech at UK Finance. Thank you Bob and to UK Finance for bringing us together today. And thank you for inviting me. As you know, I have spent a couple of months away from being City Minister. I think you'd be hard pressed to describe doing the Chief Secretary role as a holiday - I've certainly had more relaxing breaks – but it is fantastic to be back and supporting the success of the financial services sector and its contribution to growth and prosperity in every corner of the country. I am pleased that while I have been away, the digitalisation and tokenisation agenda has continued to accelerate. And as many of you know, building on this momentum is one of the things I am most excited to do back in this role. Because we are used to waves of technological development improving our lives; putting new products on to shelves, including digital shelves, and ensuring we benefit from new services. But there are also moments in the history of economic development where technology transforms the very infrastructure on which an economy operates. In the 1980s and 1990s we saw the shift from paper to electronic trading radically transform our financial markets. I believe we have reached a similar moment a generation later with the move from electronic to digital. So it is a pleasure to be here as UK Finance launches this report. This report, reinforcing the Digital Wholesale Champion's report published in July, demonstrates a powerful message for the sector, which is that digitalisation is no longer a conversation taking place at the margins. It is moving firmly into the mainstream. And that matters because the opportunities before us are significant. For the City, the whole financial services sector, and importantly, for the entire UK economy. Today, I want to deliver a clear message. That the digitalisation of wholesale financial markets is now a national endeavour. An endeavour that requires industry, government, and regulators to work together. To maintain and enhance our global competitiveness; in what is an increasingly competitive landscape. The government can create the conditions and advocate for the UK. The regulators can provide clarity. But it is industry; market participants; you; that innovate, compete, forge new pathways and drive us forwards. That is why the work of organisations such as UK Finance is so important, and why I wholeheartedly welcome today's report. One thing has become increasingly clear as I speak to firms across the sector. The debate isn't whether wholesale markets will become tokenised; it's when. And, importantly, if the UK can move quickly enough to be a leader in that global transition. And I say we can. And 2026 has already been such an important year for delivery. Significantly, we have seen the publication of the first report from the UK's Wholesale Digital Markets Champion, Chris Woolard. That report sets out an industry-led roadmap for accelerating the digitalisation of UK wholesale financial markets, identifies priority use cases, and focuses attention on the practical issues that must be solved if digital markets are to scale. It also establishes nine industry action groups, and I am looking forward to the composition of these groups being announced very soon. It has also been great to see the number and variety of firms participating, from new entrants to large incumbents, as well as the senior individuals who are giving their valuable time to contribute. I am looking forward to seeing the outputs of the next phase. The key to the success of this work is not the technology itself. The technology already exists and we have individuals and organisations with the skills to deploy it effectively. The roots of the challenge are in coordination in order to build… How do firms move together? How do platforms interact with one another? How do we ensure interoperability? How do we build liquidity? How do we create common standards and ensure the UK is leading the global discussion? And how do we generate sufficient confidence for markets to move from pilots to scale? The answers to these questions are why this work matters so much And the additional question for government and regulators is then: how do we ensure that regulation effectively and appropriately accommodates digitalisation? Regulation is often criticised for being slow to adapt to new technological challenges and a rapidly changing environment. Well, we're trying to address this. As you know, we have the Digital Securities Sandbox, and as UK Finance's report highlights, it offers a nimble way of modifying UK legislation to enable firms to roll out innovative digital solutions to market. 16 firms are currently participating, with the first firm recently approved to do live activity, and I am sure we will see more live activity soon. And we know there is more to do to ensure that the UK legal framework supports digital beyond the sandbox, building on work the government has done already to clarify the law. We will be engaging actively with the sector to map out the changes needed, and the plan for delivering them, including using the legislative tools we already have to make changes. All this builds on other work we are doing as government to support digital. This year, we have also seen continued progress on the Digital Gilt Instrument, DIGIT, which will be critical to establishing the foundations for a broader digital market ecosystem. DIGIT will be issued in Q1 2027, and we have announced our intention to prepare for potential further issuances, subject to the success of the first transaction. There is also work well underway to modernise the UK's payments ecosystem, including through infrastructure upgrades and regulatory reforms that support stablecoins, tokenised deposits and the next generation of digital settlement. In particular, I wanted to recognise the efforts of UK banks in progressing the Great British Tokenised Deposit initiative, working with UK Finance to bring tokenised sterling deposits into the UK market. The work to tokenise bank deposits complements the work that the government and the regulators are undertaking to deliver a regulatory regime for stablecoins, all in order to provide payment settlement solutions for a truly digital market. Across all these areas, we are entering a critical delivery phase over this Autumn. Let's continue to work together and whether it is the leadership shown by UK Finance. Whether it is the drive and the work of Chris Woolard and the Wholesale Digital Markets Champion Taskforce. Whether it is the Digital Securities Sandbox. Whether it is DIGIT. Each represents a different part of the same story. A story of a sector and a city choosing to innovate; whose sense of pride and ambition compel us to want to lead. A story of a country choosing to modernise. With a sense of national purpose to ensure that the markets of the future are built here in the United Kingdom. Thank you.