The UK is preparing a regulatory framework for tokenized gold: a new stage in the digitalization of the market.
The UK Financial Conduct Authority (FCA) is actively working on approaches to regulating tokenized gold, holding consultations with key market players, including major banks. This initiative is not just a formal step, but part of a large-scale strategy to digitalize the country's wholesale financial markets.
A paradigm shift in oversight
The regulator is studying not only the basic rules for this asset class, but also the potential for their use as a collateral instrument in wholesale markets. In my assessment, this is a signal that the FCA views tokenized gold not as a niche product, but as a systemic element of the future financial infrastructure. In the coming months, we may see an official announcement about the development of specific standards, which will be an important marker for institutional investors.
Of particular interest is the fact that the FCA does not regulate trading in physical gold, yet it sets rules for derivatives and exchange-traded products on this asset. This creates a unique precedent: regulating the digital representation of a physical asset may require a review of the agency's existing boundaries of competence.
Geopolitical context and competition
London has historically been the world's largest gold trading center, but the UK capital's position is no longer so unassailable. Pressure from China, as well as the growing activity of exchanges in Shanghai and Hong Kong, pose a real threat to its leadership. Without modernizing market infrastructure, including the introduction of tokenization, competitors could seize the initiative.
It is telling that the British regulator is simultaneously tightening rules for crypto companies: from September 30, 2026, to February 28, 2027, there will be a period for submitting authorization applications. This demonstrates a comprehensive approach — on the one hand, creating a favorable environment for innovative instruments, and on the other, strengthening control over risks.
My view: the FCA's initiative is a timely and strategically sound move. Tokenization of gold could increase liquidity, reduce operational costs, and attract a new generation of investors. However, success will depend on how flexible the new rules turn out to be — overly strict regulation could deter innovators, while excessive liberalization would create risks for market stability. Balance here is critically important.