USDUK FCA Prepares Tokenized Gold Rules for Wholesale Markets
Regulator Explores Bullion as Collateral While London Faces Growing Competition
TL;DR
- The UK Financial Conduct Authority is developing an approach to tokenized gold and consulting financial institutions on its use in wholesale markets.
- London remains the largest over-the-counter gold trading hub, accounting for about 70% of global notional trading volume.
- The work forms part of a wider UK push to tokenize financial markets, including securities, settlement and collateral.
Trade smarter on Jupiter, Solana’s leading DEX built for fast execution and deep liquidity.
Swap tokens at competitive rates, route across multiple liquidity sources automatically, and access perpetuals, DCA, and advanced trading tools — all in one place!
The UK Financial Conduct Authority is preparing rules for tokenized gold and consulting banks and other financial-industry participants about using the blockchain-based representation of physical bullion as collateral in wholesale markets. The initiative, reported on Aug. 10, 2026, forms part of a broader UK effort to digitize financial markets while preserving London’s position as the world’s leading center for over-the-counter gold trading.
The FCA has sought feedback from financial institutions on potential standards for tokenized gold and the opportunities and challenges associated with tokenization. An FCA spokesperson said the regulator’s work is not tied to a particular retail application and instead covers tokenization developments across the wider market.
“We're monitoring developments across tokenisation and digital assets, including emerging use cases such as tokenised gold,” the FCA spokesperson said.
The FCA plans to continue engaging with the financial industry as it develops its policy. “We'll have more to say on our approach to tokenisation soon,” the spokesperson said. The regulator is expected to provide progress on rules for tokenized digital assets within the next few months.
Tokenized gold involves creating digital tokens that represent ownership rights in physical gold, with the token issuer holding bullion as backing. The FCA’s work is examining whether such assets could also serve as collateral in wholesale financial transactions, extending tokenization beyond digital ownership records into institutional market infrastructure.
London’s Bullion Lead Meets Growing Competition
London’s over-the-counter gold market historically ranks as the world’s leading center for bullion trading and accounts for about 70% of global notional gold trading volume, according to the World Gold Council. London’s dominance, however, is increasingly being challenged by China.
The FCA’s discussions are therefore taking place alongside a wider effort to modernize UK wholesale financial markets through tokenization. That strategy includes making digitally represented assets usable across issuance, trading, settlement and collateral processes rather than limiting tokenization to investment products.
Chris Woolard, the U.K. Treasury's wholesale digital markets lead, laid out a 12-month plan in July 2026 to accelerate the digitization of the country’s financial markets. A government-backed industry task force estimated that tokenization could increase UK annual economic output by as much as 33 billion British pounds, equivalent to $44 billion, by 2035.
The broader roadmap also calls for the UK’s first tokenized government bond by early 2027 and seeks to make tokenized securities usable for trading, settlement and as collateral. Those goals parallel the FCA’s examination of tokenized gold as a potential wholesale-market collateral asset.
We’ve launched the all-new COIN360 Perp DEX, built for traders who move fast!
Trade 130+ assets with up to 100× leverage, enjoy instant order placement and low-slippage swaps, and earn USDC passive yield while climbing the leaderboard. Your trades deserve more than speed — they deserve mastery.
FCA and Bank of England Broaden Tokenization Push
The FCA and the Bank of England unveiled plans in May 2026 to modernize and tokenize financial markets, placing the tokenized-gold discussions within an existing regulatory program rather than treating bullion as an isolated digital-asset initiative.
“Tokenization has the potential to transform wholesale markets – reshaping how assets are issued, traded and settled,” Simon Walls, executive director of markets at the FCA, said.
The FCA’s current approach links tokenized gold to that wider transformation. Physical bullion would remain the asset backing the digital token, while the regulator is exploring how tokenized ownership could function within wholesale financial infrastructure and potentially serve as collateral.
The Financial Times first reported the FCA’s tokenized-gold initiative on Monday, saying the regulator had approached financial institutions to explore rules intended to foster development of the market. The FCA subsequently confirmed that it was monitoring tokenized gold and broader digital-asset use cases and planned further engagement with industry participants.
FAQ
What is tokenized gold?
Digital tokens representing ownership rights in physical gold held as backing.
What is the FCA examining?
Potential tokenized-gold rules and its use as collateral in wholesale markets.
Who is the FCA consulting?
Banks and other financial-industry participants.
What broader market functions does UK tokenization target?
Issuance, trading, settlement and collateral.
This article has been refined and enhanced by ChatGPT.
