UK FCA Eyes Exemption for Tokenized Gold from Fund Rules
The UK Financial Conduct Authority (FCA) is considering exempting tokenized gold from certain fund rules. This move would allow companies to create and trade digital tokens representing ownership of physical bullion without being subject to collective investment scheme and alternative investment fund rules.
The FCA is working with the Treasury and Bank of England to develop a dedicated framework for tokenized commodities, including gold. Tokenization could make it easier for banks to use bullion as collateral in financial deals by allowing them to transfer digital tokens instead of physical bars.
Tokenized gold works by turning ownership rights to physical bullion into digital tokens that can be bought, sold, or transferred by investors. The FCA is considering a targeted exemption from the UK's collective investment scheme and alternative investment fund rules, which would require further work with the Treasury before becoming official policy.