UK Regulator Weighs Tokenized Gold Rules to Boost London Market
The UK's Financial Conduct Authority (FCA) is exploring how tokenized gold can be used as collateral in wholesale markets. The regulator has been discussing rules for tokenized gold with major banks and other market participants, aiming to bring digital versions of the precious metal into mainstream financial markets.
The discussions build on a May policy paper published jointly by the FCA, Bank of England, and Prudential Regulation Authority, which identified tokenized assets including gold as potential collateral for uncleared over-the-counter derivatives. The FCA is examining how digital representations of physical gold can be used in wholesale markets, including as collateral for uncleared OTC derivatives.
The UK's push to establish clearer rules comes as London seeks to maintain its position as the world's leading gold-trading center. London accounts for roughly 70% of global gold trading, with a substantial scale of physical gold infrastructure, holding 9,339 tonnes of gold worth approximately $1.384 trillion at the end of March.