UK Seeks Dedicated Regime for Tokenized Gold
The UK's Financial Conduct Authority (FCA) is exploring the creation of a dedicated regulatory framework for tokenized gold. This move aims to preserve London's position as a global gold trading hub, which currently accounts for around 70% of total trading value in the market. The FCA is examining whether existing fund rules are still suitable for gold markets and considering creating a separate regime for tokenized gold.
Tokenized gold refers to a digital representation that provides ownership rights over physical gold held by the issuer. This could facilitate the transfer of gold in digital markets and enable its use as wholesale collateral. The FCA noted that tokenization could also support new forms of retail investment and the development of financial products.
The UK's efforts to maintain its competitiveness in gold trading are being driven by China's challenge to dominance in this field. The FCA's Director of Infrastructure and Exchanges, Jon Relleen, stated that they are evaluating whether current regulations are still suitable for gold markets.