The FCA is discussing tokenized gold standards with major banks. London vaults hold $1.384 trillion in gold. An announcement is expected within months.
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The U.K. Financial Conduct Authority is discussing standards for tokenized gold with major banks and other market participants, the Financial Times reported Aug. 10.
The talks examine how digital representations of physical gold could operate in wholesale markets, including as collateral. They have not yet produced a standalone FCA rulebook for tokenized gold.
The discussions build on a May 18 joint policy paper from the FCA and the Bank of England, including the Prudential Regulation Authority. That paper identified tokenized gold as a possible form of collateral for uncleared over-the-counter derivatives. The FCA and PRA said they are reviewing tokenized collateral eligibility and recognize potential benefits from tokenized money market funds and tokenized gold. Any use would be subject to standards developed with industry.
Regulators plan further policy later this year explaining how tokenized collateral can operate under the existing wholesale rules. The PRA has said tokenized traditional assets should generally receive the same prudential treatment as conventional equivalents when their legal rights and custody arrangements are comparable.
The Bank of England plans to consider how tokenized versions of assets already accepted as regulatory collateral could qualify at central counterparties under UK EMIR. The FCA and PRA are separately examining tokenized gold for uncleared derivatives collateral.
A precedent exists with funds. An April FCA policy statement confirmed that a range of money market funds, including tokenized versions, can qualify as collateral for uncleared trades under UK EMIR. The same statement said authorized U.K. funds are not prevented from investing in tokenized forms of otherwise eligible assets.
The regulatory work centers on whether the asset's legal rights, custody arrangements, ownership structure, and risk remain comparable with the conventional asset it represents. The Financial Times noted that London accounts for roughly 70% of global gold trading volume. It said the discussions come as London faces stronger competition from Asian financial centers seeking a larger role in bullion trading.
London Market Association data show London vaults held 9,339 tonnes of gold valued at about $1.384 trillion at the end of March. The World Gold Council is also developing a wholesale digital gold structure known as Pooled Gold Interests. Its proposed model combines physical ownership with digital transfer and is aimed at institutional and wholesale participants.
The FCA and Bank of England closed their broader tokenization consultation on July 3. Their timetable calls for industry workshops, a response statement during the summer, and a full cross-authority roadmap later in 2026. The Financial Times reported that an announcement on developing tokenized gold standards is expected within the next few months, citing a person familiar with the FCA's plans.
Infrastructure work is moving alongside the rules. Sixteen firms are working through the Digital Securities Sandbox. The Bank of England plans upgrades to its securities and collateral system in 2027. It is also targeting 2028 for a synchronization service connecting digital asset ledgers with sterling central bank money.
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