The UK is preparing a regulatory framework for tokenized gold — London aims to maintain its leadership.
The UK Financial Conduct Authority (FCA) is actively working on approaches to regulating tokenized gold. The regulator has already entered into dialogue with key market players, including major banks, to define the contours of future rules and stimulate the development of this segment. This is not just about basic standards, but also about the possibility of using such an instrument as a collateral asset in wholesale markets—a question that directly affects liquidity and trust in digital assets.
A strategic move in global competition
In my assessment, these consultations are not merely a formality, but part of a broader strategy to digitalize the United Kingdom's wholesale financial markets. London, while remaining the world's largest gold trading hub, faces growing pressure from Shanghai and Hong Kong. Without modernizing infrastructure, including the adoption of tokenization, the British capital risks ceding its leading position to more technologically advanced competitors.
Notably, the FCA currently does not regulate transactions in physical gold, but its jurisdiction extends to derivatives and exchange-traded products. This creates a legal vacuum for hybrid instruments, which the regulator appears intent on closing. In the coming months, we can expect an official announcement on the development of standards, which will be an important signal for institutional investors.
Alignment with crypto regulation
This initiative logically fits into the broader trajectory of British oversight. Previously, the FCA set clear deadlines for authorizing crypto companies—the application window will open on September 30, 2026, and run until February 28, 2027. Tokenized gold, sitting at the intersection of traditional finance and digital assets, requires a special approach, and the FCA is demonstrating a willingness to act proactively.
My comment: Creating clear rules for tokenized gold is not only about investor protection, but also a powerful tool for strengthening London's position as a global financial hub. If the UK gets there first, it will gain a significant competitive advantage in the race for capital flows in the era of digital assets. The only question is how flexible these rules will prove to be and whether they can strike a balance between innovation and security.