The UK Financial Conduct Authority is exploring a bespoke regulatory regime for tokenized gold products that would exempt specific offerings from existing collective investment scheme and alternative investment fund regulations.
The FCA is expected to announce its exploration of this framework today, working with the Bank of England and HM Treasury. The move targets a fundamental friction point: regulatory ambiguity around whether tokenized gold falls under existing UK fund rules has stalled market development and limited investor access.
London dominates global over-the-counter gold trading, accounting for roughly 70 percent of notional trading volume, according to the World Gold Council. Tokenization allows that massive bullion base to be fractionalized and transferred across digital markets—unlocking collateral currently locked in physical vaults. Industry participants have flagged that current uncertainty is blocking deals.
Separately, the Bank of England is considering whether to make tokenized assets, including stablecoins, eligible collateral under its Sterling Monetary Framework. The UK has already enacted stablecoin regulations and tested digital pound interoperability for cross-border payments.
For crypto-native investors and traders, this matters because it signals regulatory clarity flowing into institutional tokenization rails. London's gold market is the deepest on Earth—a bespoke regime here de-risks the entire tokenized collateral play across Europe.
