UK Regulators Prepare Tokenized Gold Framework in New FCA Initiative

TL;DR:

• The UK’s FCA is preparing a regulatory framework for tokenized gold and its use as collateral in wholesale markets.
• London concentrates around 70% of global OTC gold trading volume, highlighting the fundamental weight of this initiative.
• A government working group estimated that tokenization could add up to £33 billion ($44 billion) to the UK’s annual GDP by 2035.

The United Kingdom’s Financial Conduct Authority (FCA) is holding conversations with banks and other industry participants to establish possible rules for tokenized gold. According to sources familiar with the initiative consulted by the Financial Times, the regulator also requested feedback on the use of this tokenized asset as collateral in wholesale markets. The FCA made no official comments on the matter at the time of publication.

London operates as the world’s largest over-the-counter gold trading hub, concentrating approximately 70% of the global notional volume of that market. This dominant position lends special relevance to any regulatory framework the British regulator decides to establish, given that the rules emerging from that process could influence international standards for similar products.

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