UK FCA Prepares Tokenized Gold Rules to Support London Bullion Market

The U.K. Financial Conduct Authority is preparing rules for tokenized gold as it develops a broader approach to digital assets and tokenization. The regulator told CoinDesk it is monitoring tokenization use cases, including gold, and plans to engage with industry on the opportunities and challenges before saying more about its approach.

The move matters because London remains a central venue for global bullion trading, and regulators are looking at whether digital market infrastructure can help preserve that role. According to the World Gold Council, London’s over-the-counter gold market accounts for about 70% of global notional trading volume, though CoinDesk noted that China is increasingly challenging London’s position.

Tokenized gold refers to digital tokens that represent ownership rights in physical gold, with the issuer holding bullion as backing. The FCA said its work is not tied to a specific retail product, but is part of a wider review of tokenization across markets.

One area under discussion is whether tokenized gold could be used as collateral in wholesale markets. The FCA has reportedly approached financial institutions for feedback as it works toward new rules for tokenized digital assets, with progress expected in the coming months.

The initiative fits into a larger U.K. push to digitize financial markets. In July, Chris Woolard, the U.K. Treasury’s wholesale digital markets lead, set out a 12-month plan to accelerate market digitization, which officials project could add 33 billion pounds, or about $44 billion, to annual economic output. The FCA and Bank of England also outlined plans in May for tokenization and modernization of financial markets.