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UK
2026-08-12 12:50:12

UK FCA studies tokenized gold rules as London looks to defend its lead in bullion trading

The UK Financial Conduct Authority is working on a regulatory framework for tokenized gold as Britain looks to digitize parts of the gold market without giving up London’s dominant position in global bullion trading. According to the Financial Times, the FCA has begun talking with financial institutions about how tokenized gold should be regulated and how such products could be used in wholesale financial markets. London’s over-the-counter market currently accounts for about 70% of global notional gold trading, making the issue strategically important for the UK as other markets, including China, expand their own gold trading infrastructure. The discussions go beyond simple digital wrappers for bullion. The FCA is seeking views on whether tokenized gold could be used as collateral in wholesale markets, which would widen its role from spot and derivatives trading into financing, collateral management and settlement. Key regulatory questions still need to be settled, including the legal link between physical reserves and on-chain tokens, custody arrangements, whether reserves are fully backed, the rights attached to token ownership, and how client assets would be handled if an issuer ran into financial trouble. The move fits into a broader UK push to bring tokenization and distributed ledger technology into wholesale finance. The government has said that financial market digitization, if implemented successfully, could add about £33 billion in annual economic output.

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