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Point of Focus
- The FCA is consulting major banks on standards for tokenized gold in UK wholesale markets.
- Regulators are exploring its use as collateral for uncleared over-the-counter derivatives.
- The UK must still clarify custody, legal ownership, asset eligibility and risk requirements.
The UK’s Financial Conduct Authority is preparing standards for tokenized gold as policymakers seek to modernize wholesale markets and protect London’s dominant position in global bullion trading.
The FCA has consulted major banks and other financial-market participants about how digital representations of physical gold could operate within the existing regulatory system.
Discussions have included the potential use of tokenized gold as collateral in wholesale transactions, with further policy details expected within the coming months.
The initiative forms part of a wider push to make the UK a leading center for tokenized finance as competition intensifies from markets including Shanghai and Hong Kong.
Tokenized gold could enter collateral markets
The FCA and the Bank of England, including the Prudential Regulation Authority, identified tokenized gold as a possible form of collateral for uncleared over-the-counter derivatives in a joint policy paper published in May.
Regulators are considering whether tokenized assets that provide rights and risks comparable to their conventional equivalents can operate under existing wholesale-market rules. This approach could avoid creating an entirely separate regulatory category for every tokenized financial instrument.
JUST IN: 🇬🇧 UK regulator prepares framework for tokenized gold as it pushes to digitize financial markets. pic.twitter.com/0nZ2oUjBiC
— Watcher.Guru (@WatcherGuru) August 10, 2026
Key questions remain around legal ownership, custody, asset eligibility and risk management.
Authorities will need to establish that digital tokens are reliably backed by physical gold and that investors retain enforceable claims on the underlying metal.
London seeks to protect its bullion dominance
London handles approximately 70% of global notional gold trading volume, making it the world’s largest over-the-counter bullion hub.
London vaults held 9,339 tonnes of gold worth roughly $1.38 trillion at the end of March, according to data from the London Bullion Market Association.
Tokenization could help the city preserve that position by enabling gold ownership to be transferred and settled more quickly. It could also make the metal easier to deploy as collateral across institutional markets.
The work comes as Asian financial centers seek a larger share of international gold trading. Clear standards could give London an early advantage in connecting its established bullion infrastructure with blockchain-based settlement systems.
UK accelerates its tokenization strategy
The gold discussions are one element of the UK’s broader financial-digitization agenda. A government-backed task force estimated that tokenization could add as much as £33 billion to annual economic output by 2035.
Sixteen companies are already testing tokenized assets and market infrastructure through the UK’s Digital Securities Sandbox. The government is also targeting early 2027 for its first tokenized sovereign bond transaction.
JUST IN: 🇺🇸 NYSE developing onchain settlement platform for tokenized securities. pic.twitter.com/kwU5VT8rxI
— Whale Insider (@WhaleInsider) August 10, 2026
International competition is accelerating. In the US, the New York Stock Exchange is advancing plans for onchain trading and settlement of tokenized securities.
For the UK, the next step is turning experimentation into clear operating standards. If regulators can resolve questions involving custody, ownership and collateral eligibility, tokenized gold could become an important bridge between London’s centuries-old bullion market and emerging blockchain-based finance.
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