UK regulators prepare tokenized gold framework for wholesale markets
The UK is stepping up work on tokenized financial markets as regulators examine how digital versions of traditional assets could function within the financial system. Tokenized gold is now part of that effort, with discussions covering possible rules and its use as collateral in wholesale trading.
Highlights
- UK Financial Conduct Authority is consulting banks and industry players on creating regulatory standards for tokenized gold in wholesale markets.
- London handles about 70% of global notional gold trading, incentivizing the UK to lead development of tokenized gold market standards as digital infrastructure grows.
- A government-backed task force estimates tokenization could add £33 billion ($44 billion) to UK GDP by 2035 and targets the first tokenized government bond by early 2027.
FCA consultations on tokenized gold rules
As reported by Cointelegraph, citing the Financial Times, the UK’s Financial Conduct Authority has held talks with banks and other industry participants on potential rules for tokenized gold.People familiar with the matter told the newspaper that the regulator has also sought feedback on the use of tokenized gold as collateral in wholesale markets. The FCA is reportedly preparing to outline plans for new regulatory standards for the asset, while Cointelegraph says it has approached the regulator for comment.
Push ties into broader UK tokenization strategy
London remains the world’s largest over-the-counter gold trading hub, accounting for about 70% of global notional gold trading volume, according to the World Gold Council. That position gives the UK a strong commercial incentive to shape standards for tokenized gold as digital asset infrastructure develops.The talks also fit into a broader UK push to expand tokenized financial markets. A government-backed industry task force said in July that tokenization could add as much as 33 billion British pounds, or $44 billion, to the UK’s annual economic output by 2035, and its roadmap calls for the UK’s first tokenized government bond by early 2027 while seeking to make tokenized securities usable for trading, settlement and as collateral.
In our earlier article on the UK’s plans to regulate tokenized gold, we explained that the FCA has been consulting with banks and other market participants on how blockchain-based claims on bullion should be supervised. We also noted that the regulator is gathering views on whether tokenized gold could be used as collateral in wholesale markets, as part of a wider push to modernize London’s gold and broader financial-market infrastructure amid rising competition from Asian hubs.
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