The UK Financial Conduct Authority is evaluating potential exemptions from existing fund regulations for tokenized gold products. This initiative is part of a wider effort by British regulators to promote the adoption of tokenization within wholesale financial markets.
The FCA is collaborating with the Bank of England and HM Treasury to develop a specialized regulatory framework for tokenized commodities. Officials suggest that tokenization could simplify the division and transfer of gold, potentially enabling its use as collateral in financial transactions.
Industry representatives have expressed concerns that current regulatory ambiguity regarding collective investment schemes and alternative investment fund rules may hinder market development. These participants warn that such uncertainty could restrict investor access to tokenized assets.
Simultaneously, the Bank of England is reviewing whether tokenized assets, such as stablecoins, should qualify as eligible collateral under the Sterling Monetary Framework. The UK is also actively working on stablecoin regulations and testing digital pound interoperability.
London currently maintains its position as the leading global over-the-counter gold market. According to the World Gold Council, the city accounts for approximately 70 percent of the total global notional trading volume for gold.
