UK regulators to prepare tokenized gold framework: Report

The UK's Financial Conduct Authority (FCA) is reportedly formulating a regulatory framework for tokenized gold and its utilization as collateral assets in wholesale markets, according to a recent report. The FCA has engaged in discussions with banks and other industry stakeholders regarding potential rules for tokenized gold, with feedback being sought on its use as collateral in wholesale markets, sources familiar with the matter revealed to the Financial Times.

The regulator is reportedly drafting plans for new regulatory standards concerning tokenized gold. Cointelegraph has reached out to the FCA for comment on the matter. London, as the world's largest over-the-counter gold trading hub, handles approximately 70% of global notional gold trading volume, as per the World Gold Council. These talks unfold against the backdrop of the UK's broader initiative to expand tokenized financial markets.

A government-backed industry task force, in July, projected that tokenization could inject up to £33 billion ($44 billion) into the UK's annual economic output by 2035. The roadmap also calls for the UK's inaugural tokenized government bond by early 2027 and aims to render tokenized securities applicable for trading, settlement, and as collateral.