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Has the Dubai Court opened the door for pay packets paid in PEPE?
Author: Andy Wood
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A competitive scramble among the world’s largest asset managers to launch tokenized funds is underway, with Bank of New York Mellon reporting that “FOMO”—fear of missing out—is driving rapid institutional adoption of blockchain-based fund infrastructure. The Tokenization Race According to Pantera Capital’s Q1 2026 report, 168 new tokenization assets launched in 2025 alone, an unprecedented pace of institutional engagement with blockchain technology. The momentum has continued into 2026, with major players racing to establish market position. The competitive landscape includes some of finance’s most established names: - BlackRock: BUIDL fund at $2.4 billion in assets
- Goldman Sachs: Operating blockchain infrastructure through GS DAP
- Fidelity Investments: Participating in multi-manager tokenized initiatives
- Franklin Templeton: Early mover in on-chain fund products
- Federated Hermes: Engaged in collaborative tokenization projects
- BNY Investments Dreyfus: Participating in integrated platform launches
A New Paradigm for Fund Distribution The attraction goes beyond technological novelty. Tokenized funds offer tangible operational benefits: - 24/7 settlement: Subscriptions and redemptions process continuously rather than at daily NAV cuts
- Fractional ownership: Investors can access funds with smaller minimums
- Automated compliance: Smart contracts can enforce eligibility requirements
- Global accessibility: Blockchain infrastructure crosses borders more easily than traditional custodial arrangements
- Reduced costs: Eliminating intermediary processes reduces operational expenses
The BNY-Goldman System A notable development has been the collaboration between BNY Mellon and Goldman Sachs to create the first US system where money market fund subscriptions integrate directly across both traditional and tokenized platforms simultaneously. Goldman Sachs runs the blockchain layer through its Digital Asset platform (GS DAP), while BNY provides custodial and settlement services. The launch was not a quiet pilot—BlackRock, Fidelity, Federated Hermes, Goldman Sachs Asset Management, and BNY Investments Dreyfus all participated from day one. Why the Urgency? Several factors explain the institutional rush: - First-mover advantages: Early entrants are establishing brand positioning in a new market
- Client demand: Institutional allocators increasingly expect blockchain-native options
- Competitive pressure: No major asset manager wants to be left behind
- Regulatory clarity: Improved frameworks reduce compliance risk for new products
- Infrastructure maturity: Tokenization platforms like Securitize have reached enterprise-grade reliability
Challenges Remain Despite the enthusiasm, tokenized funds face ongoing challenges: - Regulatory frameworks vary significantly across jurisdictions
- Integration with existing portfolio management systems requires investment
- Investor education remains necessary
- Questions around custody, insurance, and operational resilience persist
Tax Considerations For investors in tokenized funds, tax treatment questions include: - Whether blockchain-based fund shares receive equivalent treatment to traditional shares
- How continuous settlement affects holding period calculations
- Reporting requirements for blockchain-based investment positions
- Cross-border tax implications for globally accessible products
The emergence of tokenized fund infrastructure may eventually simplify certain tax reporting through automated record-keeping, but current implementations still require careful attention to compliance obligations.
If you have any queries relating to tokenized funds and institutional blockchain adoption or cryptocurrency and blockchain taxation more generally, then please do not hesitate to get in touch. The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.
Author: Andrew Wood
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About Andy Wood
Andy is a practising barrister and tax advisor with decades of experience. His expertise has led him to appear on Sky News, on a range of podcasts and at Crypto events worldwide. He has been published in The Telegraph, The Times, and a range of financial magazines. He is passionate about sharing his knowledge, the latest information, and his best advice to his community of Crypto Tax Degens.
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Did you know that Andy wrote the first comprehensive UK tax guide to cryptocurrencies for professionals? Well, he did. Cryptocurrency and Other Digital Assets : Tax Law & Practice
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FAQ’s
Let’s shed some light on the most common questions people are asking about crypto tax in the UK. Looking for more information? Join the community or reach out to us.
1What is cryptocurrency tax in the UK?
Cryptocurrency tax in the UK refers to the taxes you may owe on your cryptocurrency transactions and holdings. It includes taxes on buying, selling, trading, mining, staking, lending (and plenty more) and even receiving cryptocurrencies.
2Do you need to pay tax on Crypto in the UK?
You do not need to pay tax on your cryptocurrency holdings in the UK until you dispose of them (i.e. sell, gift, or exchange them for other crypto). At that point, you will need to calculate and pay any CGT that is due on the gain made.
3How do I avoid paying crypto tax in the UK?
It is essential to stress that you cannot avoid paying taxes on cryptocurrency in the UK. Cryptocurrency transactions are subject to tax regulations, and attempting to evade taxes is illegal. Always follow the law and report your crypto activities to HMRC to ensure compliance and avoid legal consequences.
4Does HMRC know about my crypto?
HMRC (His Majesty's Revenue and Customs) has access to information about cryptocurrency transactions through various means, including exchanges and financial institutions. It's important to assume that HMRC has the capability to track your crypto activities, so it's best to report them accurately to comply with tax laws.
5How can I keep track of my crypto transactions for tax purposes?
Use cryptocurrency tax software or tools to record all your transactions. This will help you calculate your tax liability accurately.
Check out our latest reviews ranking the leading crypto tax software platforms to help you choose the right tool.
6When do I need to report my crypto taxes?
You should report your crypto taxes to HM Revenue and Customs (HMRC) annually by the tax deadline, which is typically January 31st for the previous tax year.
7How do I report my cryptocurrency gains and losses to HMRC in the UK?
You will need to report your cryptocurrency gains and losses to HMRC on your self-assessment tax return. This involves filling in the capital gains section of the tax return and providing details of the cryptocurrency transactions you have made during the tax year. It is important to keep accurate records of your cryptocurrency transactions, including the date of acquisition, the amount acquired, and the cost, as this information will be needed to calculate the gain or loss made.
8What if I make a loss on my crypto investments?
You can offset crypto losses against crypto gains to reduce your tax liability. Report the losses to HMRC to take advantage of this.
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