UK Regulators Consider Exempting Tokenized Gold From Fund Rules

The UK's Financial Conduct Authority (FCA) is considering exempting tokenized gold products from existing fund rules, as part of an effort to make digital bullion more easily usable in London's wholesale financial markets. The regulator has been working with the Treasury and Bank of England on a dedicated framework for tokenized gold.

The FCA plans to set out potential changes on Monday, as part of its work with the Treasury and Bank of England on whether tokenized gold or commodities more generally need a dedicated regulatory framework. One option under consideration is a targeted exemption from rules covering collective investment schemes and alternative investment funds.

Tokenized gold represents ownership rights over physical bullion held by an issuer or custodian, which can then be transferred between investors while the underlying gold remains in storage. Industry participants have told the FCA that uncertainty over whether such products fall within existing frameworks could restrict investor access to them.