UK FCA Weighs Tokenized Gold Exemption Amid China Challenge

The UK Financial Conduct Authority (FCA) is considering exempting tokenized gold from certain fund rules. The FCA is working with the Treasury and the Bank of England to study a dedicated framework for tokenized gold and other tokenized commodities.

Tokenized gold allows ownership rights to physical bullion to be turned into digital tokens, which can be bought, sold, or transferred by investors without moving the actual gold. The UK currently handles about 70% of global gold trading volume, according to the World Gold Council.

The FCA believes tokenization could make bullion easier to divide and transfer through digital markets, potentially making it a more attractive option for banks to use as collateral in financial deals.