FCA consults banks on tokenized gold rules and collateral use. London's 70% OTC gold share gives the framework global weight. First tokenized gilt due by 2027.
The Financial Conduct Authority is in talks with banks and other market participants about possible rules for tokenized gold, according to people familiar with the initiative. The regulator also asked for feedback on using the tokenized asset as collateral in wholesale markets, the Financial Times reported. The FCA declined to comment.
London is the world's largest over-the-counter gold trading hub, handling roughly 70% of global notional volume. That position gives the British regulator's work outsized weight, since rules it sets could shape international standards for similar products.
The FCA's push is part of a broader government plan to expand tokenized financial markets. A government-backed working group has said tokenization could add up to £33 billion ($44 billion) to UK gross domestic product annually by 2035.
The roadmap accompanying that report calls for the country's first tokenized government bond by early 2027 and aims to make tokenized securities usable for trading, settlement and collateral. Regulatory standards for tokenized gold are a step in that direction, with direct implications for the infrastructure of UK wholesale capital markets.
Gold trades around $4,341 an ounce, more than $1,000 below its February record high.
The FCA initiative follows similar moves elsewhere. The Depository Trust and Clearing Corporation added Plume Network to its digital assets group after Plume registered as a transfer agent with the SEC in October. Tokenized QQQ drove 288% of July volume; Robinhood Chain bets on it.
For UK retail investors, the tokenized gold framework would sit alongside a broader expansion of crypto access. Robinhood has rolled out commission-free trading of over 50 cryptocurrencies in the UK, and Coinbase now offers 24/5 U.S. stock trading to UK users. A tokenized gold market would give institutions a way to use the metal as collateral without moving physical bars, a change that could alter how London's bullion banks manage their balance sheets.
The FCA has not published a timeline for the consultation. The working group's report sets the tokenized bond issuance for early 2027, which gives the regulator roughly a year to finalize rules before the first digital gilt reaches the market.
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