UK FCA eyes tokenized gold market share

TLDR

The UK Financial Conduct Authority is drafting rules for tokenized gold in wholesale markets to help London protect its roughly 70 percent share of global bullion trading.

1. FCA is exploring regulated frameworks for tokenized gold, including its use as collateral, and is already in early discussions with banks and market participants.
2. London sees tokenized gold as a strategic tool to modernize settlement and defend its dominant bullion role against rising hubs in Shanghai and Hong Kong.
3. For crypto users, this is another strong signal that regulated real world asset tokenization is maturing, with further UK proposals on tokenized assets expected in coming months.

Deep Dive

1. What FCA Is Planning

Reports indicate the FCA is consulting banks and industry participants on regulatory frameworks for tokenized gold, focusing on wholesale markets and whether such tokens can be accepted as collateral.

Tokenized gold here means blockchain based tokens that represent ownership rights in specific physical bullion, typically held in custody by an issuer or vault.

The FCA does not directly supervise physical bullion trading but does regulate gold derivatives and exchange traded products, so the work is about plugging tokenized gold into this existing rulebook rather than inventing an entirely new market.

2. Londons Strategic Motive

London currently handles about 70 percent of global gold trading, but faces growing competition from bullion centers in Shanghai and Hong Kong. Regulators appear to see tokenization as one way to keep Londons infrastructure attractive.

Successful retail products such as HSBCs tokenized gold in Hong Kong, which has seen more than $2.2 billion traded across over 276,000 transactions, show that tokenized bullion can gain real traction once regulated and integrated with mainstream finance.

The World Gold Council argues that digital gold can remove constraints like bar size and vault location, allowing more flexible settlement and potentially tighter integration with global collateral and funding markets.

3. Signals To Watch Next

The FCA and the Bank of Englands Prudential Regulation Authority have flagged plans to publish wider proposals on integrating tokenized assets within existing regulations, so formal consultation papers are a key next milestone.

Watch which banks and infrastructure providers back early tokenized gold platforms, and whether they focus purely on wholesale collateral or also explore crossover with crypto venues and on chain settlement.

Golds recent price cycle, with records near $5,595 an ounce in January 2026 and a pullback to about $4,380 by August 10, also matters, because high value and volatility shape how attractive tokenized gold is as collateral versus other RWAs such as tokenized Treasuries.

Conclusion

The FCAs move on tokenized gold is less about creating a crypto style retail product and more about defending Londons bullion dominance by modernizing how gold is represented and used in wholesale finance.

For crypto and RWA investors, it is a clear sign that asset backed tokens are moving further into the regulated core of capital markets, with gold likely to join Treasuries as a flagship tokenized collateral asset.