Key points

  • The FCA opened a call for input on whether tokenized gold could improve trading, transfers, pledging and custody in UK markets.
  • The regulator is examining wholesale use cases and uncertainty around collective investment scheme and alternative investment fund rules.
  • Responses are due by October 23, 2026; no exemption, bespoke regime or approval for a particular product has been adopted.

Britain's Financial Conduct Authority has opened a consultation on tokenized gold, asking whether digital ownership records could make the metal easier to trade, transfer, pledge and hold in UK markets. The call for input, published September 14, seeks industry feedback through October 23 and could lead to guidance or a bespoke regulatory regime. It does not change existing rules or approve any specific product.

What the regulator is asking

Tokenized gold generally refers to digital tokens representing ownership rights over physical bullion held by an issuer or custodian. The FCA wants evidence on wholesale-market uses, operational challenges and perceived uncertainty around the regulatory perimeter for collective investment schemes and alternative investment funds. That distinction matters because a token's legal structure, redemption rights and management arrangements may determine whether it is treated like direct ownership of a commodity or a regulated fund interest.

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The consultation is aimed at gold-market participants, clearing members, asset managers, digital-asset infrastructure providers, consumer groups and firms developing gold-backed products. The FCA said it wants to test whether tokenization can improve efficiency and competitiveness while preserving market integrity and consumer protection. A future response could provide guidance, propose dedicated rules or leave the existing framework largely intact.

Why gold came into focus

Gold emerged as a separate policy question after the FCA and Bank of England sought feedback in May on tokenization across UK wholesale markets. Respondents highlighted bullion because London is the world's largest center for spot gold trading. The FCA said tokenization could make gold easier to move across digital markets and potentially more useful as wholesale collateral, while also supporting new retail products.

The broader May paper described possible benefits including faster settlement, more efficient collateral movement, fewer duplicate ledgers and automated processes. It also emphasized that tokenized and conventional infrastructure may need to coexist for years. Applying those ideas to bullion could connect vaulted metal to digital settlement systems, but only if ownership records, custody arrangements and transfers remain legally reliable across platforms.

What remains unresolved

The consultation leaves several practical questions open. Market participants will need to explain how token holders verify the underlying gold, who bears responsibility if records and vault holdings diverge, and how redemption works during market stress. Regulators must also consider cyber resilience, financial crime controls, interoperability and whether retail buyers understand the rights attached to a token. Competing token formats could fragment liquidity if they cannot move across settlement systems, while inconsistent legal claims could make two apparently similar gold tokens carry very different risks. Clear standards would therefore need to cover both technology and enforceable ownership. A digital record can simplify transfer without removing the risks associated with the issuer, custodian or settlement system.

Independent reports from Reuters and the Financial Times described the review as part of Britain's effort to protect London's bullion-market position and modernize wholesale finance. The potential commercial effect will depend on the FCA's eventual treatment of fund rules and on whether the Bank of England recognizes suitable tokenized assets in collateral arrangements. Until the consultation closes and regulators publish their response, tokenized-gold firms still face uncertainty rather than a new regulatory shortcut.

Sources

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