FCA considers exempting tokenized gold from fund rules to defend London market
The Financial Conduct Authority is exploring a bespoke regulatory framework with the Treasury to carve out digital gold from traditional fund laws.
- The Financial Conduct Authority is considering a bespoke regulatory regime for tokenized gold, potentially exempting it from existing U.K. fund rules.
- The regulator said tokenized gold could make the metal easier to transfer and use as wholesale collateral while supporting new retail investments and financial products.
- The proposal is part of a broader U.K. effort to modernize wholesale markets through tokenization and preserve London’s position as the leading global gold-trading hub.
The U.K.’s financial watchdog could exempt tokenized gold from the country’s fund regulations.
The Financial Conduct Authority is considering building a “bespoke regime for tokenized gold,” the regulator said on Monday.
"In our discussions with industry on tokenization, tokenized gold has emerged as an area of interest," Jon Relleen, director of infrastructure and exchanges at the Financial Conduct Authority, told the FT prior to the FCA’s announcement. "We're keen to understand whether existing regulatory frameworks remain the right fit for gold markets and how innovation could strengthen the efficiency and competitiveness of U.K. markets".
The FCA told CoinDesk in August that it was preparing rules for tokenized gold as part of its digital asset strategy to ensure London remains the top global hub for the trade in the precious metal. London’s over-the-counter market (OTC) market has historically ranked as the number one center for gold trade and currently accounts for 70% of the world’s notional trading volume, though China is challenging this dominance.
“Gold tokenisation could make gold easier to transfer and use across digital markets, particularly as wholesale collateral,” the FCA said. “It may also support new forms of retail investment and product innovation.”
Tokenized gold is a digital representation of the precious metal that grants the holder ownership rights over the physical gold held by the issuer of the digital version.
The proposals are part of a wider push by U.K. regulators to encourage tokenization of wholesale financial markets. The U.K. and the U.S. laid out a joint plan in July to make it easier for tokenized financial products to move between their markets.
The Bank of England and the FCA said they were seeking feedback on their plans for tokenization and its use across financial markets. In a joint statement, they said it was time to utilize tokenization in financial infrastructure to drive economic growth and innovation.
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As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Why it matters:
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
