The UK Financial Conduct Authority, or FCA, on Sept. 14 published a call for input titled Tokenised gold — opportunities and risk for UK wholesale markets, seeking views on whether tokenising gold could improve the way it is traded, transferred, pledged, and held in UK markets. According to the FCA notice, responses will be accepted until Oct. 23.
Classification under fund rules is the central issue
In the paper, the FCA said it wants feedback on three main points: how tokenised gold could be used in wholesale markets, where operational or structural difficulties may arise, and how uncertainty around the boundary between a Collective Investment Scheme, or CIS, and an Alternative Investment Fund, or AIF, is affecting the market.
The third question sits at the heart of the consultation. If a digitally transferable token backed by physical gold is treated as a CIS or an AIF, the product could fall under the full set of fund regulations. If that boundary remains unclear, bringing products to market becomes harder.
The FCA said possible next steps after reviewing responses include issuing guidance or setting up a dedicated regime for tokenised gold.
Consultation targets market participants, asset managers, and infrastructure providers
The regulator listed a detailed set of intended respondents. They include participants in the gold market such as clearing members, firms developing or assessing tokenised gold products, asset managers running gold-based CIS or AIF structures, technology and infrastructure providers serving digital asset platforms, consumer groups and investors focused on gold-backed products, and stakeholders interested in the tokenisation of other commodities.
FCA says the gold consultation grew out of responses to its May paper
The FCA said the document did not emerge in isolation. In May, it and the Bank of England jointly launched a consultation on the future of tokenisation in UK wholesale financial markets. According to the regulator, respondents in that exercise specifically raised gold, noting that London is the world’s largest spot gold trading center. That feedback led the FCA to open a separate consultation focused on tokenised gold.
On the same day, the FCA also published feedback statement FS26/1, outlining the industry responses to the May consultation and the steps that follow. That earlier consultation was published on May 18 and closed on July 3.
FCA points to collateral use cases and sets out a timeline
On possible benefits, the FCA said tokenisation could make gold easier to transfer and use across digital markets, especially as collateral in wholesale settings.
Under FS26/1, the regulator plans to publish a roadmap later this year setting target timelines for its wholesale-market tokenisation work. It also expects to consult in the first half of 2027 on custody rules for Relevant Specified Investment Cryptoassets, or RSICs.
UK tokenisation efforts have been expanding
ABMedia said the UK has recently stepped up work related to tokenisation. It cited a July report by Chain News saying the country’s first on-chain government bond, DIGIT, is being arranged on the HSBC Orion platform and is expected to be issued in the first quarter of 2027.
On tokenised gold itself, ABMedia also cited a Chain News report from March saying the market capitalization of the asset class had exceeded $4.4 billion.