UK regulators to prepare tokenized gold framework: Report
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
The UK's Financial Conduct Authority (FCA) has reportedly engaged in discussions with banks and industry participants regarding potential regulatory rules for tokenized gold. The FCA is also gathering feedback on using tokenized gold as collateral in wholesale markets and is preparing to outline new regulatory standards for this asset class, according to sources cited by the Financial Times. Cointelegraph has sought comment from the FCA on these developments.
Why it matters
London is the largest global hub for over-the-counter gold trading, representing about 70% of worldwide notional gold trading volume. Establishing a regulatory framework for tokenized gold could facilitate the growth of tokenized financial markets, a key focus of the UK government, which believes tokenization might add up to £33 billion to the UK’s annual economic output by 2035.
Key context
The UK government is promoting the expansion of tokenized financial markets through an industry task force that plans to introduce the UK’s first tokenized government bond by early 2027. The task force aims to enable trading, settlement, and collateral use of tokenized securities. Tokenized gold is part of this broader initiative to modernize and digitize financial assets.
Key numbers and entities
The Financial Conduct Authority (FCA), the World Gold Council, and an unnamed government-backed industry task force are the primary entities mentioned. London accounts for approximately 70% of global notional gold trading volume. The UK government task force projects tokenization could add up to £33 billion ($44 billion) annually to the UK economy by 2035.
What remains unclear
The source does not provide specific details about the contents of the forthcoming FCA regulatory standards for tokenized gold. It also does not include direct comments from the FCA, which Cointelegraph has sought but not received. No precise timeline for the release of the regulatory framework is given.