UK Regulators Eye Tokenized Gold Exemption to Boost Wholesale Markets

The UK's Financial Conduct Authority (FCA) is exploring ways to exempt tokenized gold from existing fund rules, aiming to modernize wholesale markets and maintain London's position as a global bullion trading hub.

Tokenized gold refers to digital tokens representing ownership rights in physical bullion held by an issuer or custodian. Industry participants have expressed concerns that uncertainty about the regulatory status of these products may limit their appeal to investors.

The FCA is working with the Treasury and the Bank of England to consider a targeted exemption from the collective investment scheme and alternative investment fund regimes for tokenized gold, or potentially other commodities as well.

Jon Relleen, the FCA's director of infrastructure and exchanges, noted that tokenized gold has emerged as a point of interest in discussions with market participants. The regulator aims to understand whether current frameworks still suit gold markets and how digital innovation can improve efficiency and competitiveness.