The United Kingdom’s Financial Conduct Authority is considering whether tokenized gold products should be exempt from some fund rules as part of a broader effort to expand asset tokenization across wholesale markets, according to a Financial Times report.
The FCA is expected to announce later Monday that it is exploring a bespoke regime for tokenized gold, or tokenized commodities more broadly, in coordination with the Bank of England and HM Treasury. The regulator has not reached a final decision.
Tokenization could make gold easier to divide and transfer across digital markets, potentially unlocking more of London’s bullion reserves for use as collateral in financial transactions, the FT said.
Unnamed industry participants told the FT 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 proposals are part of a wider regulatory push by UK authorities to broaden tokenization. The Bank of England is separately considering whether tokenized assets, including stablecoins, could qualify as eligible collateral under its Sterling Monetary Framework.
London remains the world’s dominant over-the-counter gold market, accounting for roughly 70% of global notional trading volume, according to the World Gold Council.
The UK has also been advancing stablecoin regulation and testing digital pound interoperability for cross-border payments.
