UK FCA Develops Tokenized Gold Framework with Major Banks

The UK Financial Conduct Authority (FCA) is working on a regulatory framework for tokenized gold, collaborating with major banks and other industry participants. The goal is to establish standards for the use of digital representations of physical gold in wholesale markets, including as collateral.

London handles approximately 70% of global gold trading, according to the Financial Times report. The FCA's initiative builds on a joint policy paper from May, which identified tokenized gold as a possible form of collateral for uncleared over-the-counter derivatives.

The regulatory framework will likely adapt existing wholesale market rules rather than creating a separate category for tokenized assets. The Bank of England plans to consider how tokenized versions of eligible assets can qualify as central counterparty collateral under UK EMIR.