The UK Financial Conduct Authority is considering whether tokenized gold products should be exempt from some fund rules, according to a Financial Times report. The move would form part of a broader regulatory effort to expand tokenization in wholesale markets, with the FCA working alongside the Bank of England and HM Treasury on a possible bespoke framework for tokenized gold and other tokenized commodities. The regulator is expected to argue that tokenization could make gold easier to divide and transfer across digital markets, and could open the door for a larger share of London’s bullion reserves to be used as collateral in financial transactions. Industry participants cited by the FT warned that uncertainty over whether tokenized gold falls under the UK’s collective investment scheme or alternative investment fund rules could slow development and restrict access for some investors. The FCA has not made a final decision. The report comes as the Bank of England also examines whether tokenized assets, including stablecoins, could qualify as collateral under its Sterling Monetary Framework, while the UK continues work on stablecoin rules and digital pound interoperability in cross-border payments.
The UK Financial Conduct Authority is considering whether tokenized gold products should be exempt from some fund rules, according to a report from the Financial Times. The discussion sits within a wider push by UK regulators to expand tokenization across wholesale markets.
The FT said the FCA is expected to say later on Monday that it is exploring a bespoke regime for tokenized gold, or tokenized commodities, together with the Bank of England and HM Treasury.
FCA reviews how tokenized gold should be regulated
The regulator is expected to say tokenization could make gold easier to divide and transfer in digital markets. It could also allow a larger portion of London’s bullion reserves to be used as collateral in financial transactions.
According to the FT, unnamed industry participants warned the FCA that uncertainty over whether tokenized gold products fall under the UK’s collective investment scheme rules or alternative investment fund rules could slow development and limit access for some investors.
The report added that the FCA has not made a final decision.
Broader UK tokenization push remains underway
The proposal comes as UK authorities press ahead with tokenization across wholesale markets. The FT also said the Bank of England is considering whether tokenized assets, including stablecoins, could become eligible collateral under its Sterling Monetary Framework.
London remains the world’s leading over-the-counter gold market, accounting for about 70% of global notional trading volume, according to the World Gold Council.
Beyond tokenized gold, the UK has also been developing stablecoin rules and testing digital pound interoperability in cross-border payments.
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