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Britain's Financial Conduct Authority is exploring a bespoke regulatory regime for tokenized gold, potentially carving the asset class out of existing UK fund rules in a joint push with the Treasury. Director of infrastructure and exchanges Jon Relleen told the FT that tokenized gold had "emerged as an area of interest" in industry talks on tokenization, and that the regulator wants to know "whether existing regulatory frameworks remain the right fit for gold markets." The proposal lands as London's over-the-counter market still clears roughly 70% of global gold notional volume, a share China has been steadily challenging.
Why it matters
London's role as the world's gold trading center is structural. The OTC market has ranked as the number one venue for gold trade for decades, with the 70% global volume share reflecting deep liquidity, established custodian banks, and the LBMA price benchmarks the rest of the world still references. Letting that pipeline migrate to a jurisdiction with a more permissive tokenization framework would cost the UK not just fees but influence over how the metal is priced, cleared, and used as collateral.
The bespoke gold push also sits inside a broader UK tokenization program. The Bank of England and the FCA are jointly seeking industry feedback on tokenization across financial markets, and in July the UK and US laid out a joint plan to make it easier for tokenized products to move between the two jurisdictions. Tokenized gold would be the first concrete asset class to land inside that framework.
Market impact
The immediate impact is regulatory: tokenized gold issuers would no longer need to squeeze digital gold wrappers into existing fund-vehicle rules, opening lighter-touch issuance and broader retail access. The FCA explicitly flagged wholesale collateral use, a signal the regulator sees tokenized gold as plumbing for repo and securities lending rather than just a retail wrapper. Tokenized commodities have been one of the more resilient RWA categories through 2025, and a UK-tailored regime would put London-based issuers on a more even footing with the dominant Middle Eastern and Swiss venues for tokenized bullion.
Frequently asked questions
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What is the FCA proposing for tokenized gold?
The FCA is exploring a bespoke regulatory regime for tokenized gold that could exempt it from existing UK fund rules, in a joint push with the Treasury.
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Why is the FCA doing this now?
London still clears roughly 70% of global gold notional volume, but China has been steadily challenging that dominance. The regulator wants to keep the trading anchored to UK rails as tokenization reshapes how gold is moved and used as collateral.
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What is tokenized gold?
Tokenized gold is a digital representation of the precious metal that grants the holder ownership rights over the physical gold held by the issuer of the digital version.
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How does this fit the broader UK tokenization push?
The bespoke gold regime sits inside a wider Bank of England and FCA tokenization program. In July the UK and US also laid out a joint plan to make it easier for tokenized products to move between the two jurisdictions.
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What could tokenized gold be used for under the new framework?
The FCA explicitly flagged wholesale collateral use, suggesting the regulator sees tokenized gold as plumbing for repo and securities lending markets rather than just a retail investment wrapper.
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