TLDR
The UK Financial Conduct Authority is consulting on whether some tokenized gold products should sit outside existing fund rules to support tokenization in wholesale markets.
- The FCA is seeking feedback on exempting certain tokenized gold instruments from collective investment scheme and alternative investment fund rules, with options ranging from guidance tweaks to a bespoke regime.
- The review targets tokenized claims on physical bullion, aiming to make Londons gold reserves easier to divide, move and use as collateral, which could benefit gold-backed tokens and broader real-world asset projects.
- Nothing is decided; outcomes will depend on consultation responses, a joint FCABank of England tokenization roadmap and whether any exemptions apply only to wholesale desks or eventually to some institutional investors.
Deep Dive
1. What The FCA Is Reviewing
The FCA has launched a formal call for input on how tokenized gold should be treated in UK regulation, focusing on tokens that represent ownership of physical bullion with transparent backing, defined ownership rights and robust redemption.
According to a call described by Cointelegraph, the consultation asks whether some tokenized gold products should be exempt from the UKs collective investment scheme (CIS) and alternative investment fund (AIF) regimes, which currently create uncertainty over who can hold these instruments and how they must be structured. The consultation, open until 23 October 2026, considers options such as clarifying existing rules, creating a specific classification, targeted rule changes or even a bespoke regime for tokenized gold or commodities more broadly.
This work runs alongside a wider wholesale tokenization program, where the FCA and Bank of England plan to publish a tokenization roadmap after receiving 123 industry responses on digital securities and collateral.
Regulators are not banning tokenized gold; they are deciding whether to adapt existing fund rules or carve out a tailored space for it in wholesale markets.
2. Why Tokenized Gold And Crypto Care
Tokenized gold gives holders a blockchain-based claim on vaulted bars, with the gold staying in storage while tokens move digitally. The FCAs review explicitly targets this model in Londons gold market, which accounts for about 70% of global over-the-counter trading by volume.
Reports from crypto.news and others note that regulators see tokenization as a way to make bullion easier to divide and transfer, and to unlock more of Londons reserves as collateral in financial transactions. Existing gold tokens such as Tether Gold (XAUT) and PAX Gold (PAXG) are cited as examples of this model, though they are issued outside the UK.
If the FCA clarifies or relaxes fund rules for certain structures, UK-based gold tokens and tokenized collateral platforms could see lower legal friction, potentially making it easier for banks, clearing houses and large trading firms to use tokenized bullion alongside stablecoins and other tokenized assets.
For crypto users interested in real-world assets, this is a signal that regulated gold-backed tokens and tokenized collateral rails may expand, especially at the institutional and wholesale level.
3. Key Timelines And Risks To Monitor
In the near term, the key milestone is the close of the FCA consultation in late October 2026 and the subsequent publication of its tokenized gold conclusions and the joint tokenization roadmap with the Bank of England.
Regulators have stressed that no decision has been made. Open questions include whether any exemptions will be limited to wholesale markets, what conditions will be imposed around custody, transparency and redemption, and how tokenized gold will interact with other tokenized collateral such as money market funds and stablecoins.
There is also a risk of fragmentation if UK rules diverge from regimes like the EUs Markets in Crypto-Assets, which treats gold-backed tokens as asset-referenced tokens, or from other jurisdictions experimenting with tokenized deposits and RWAs. That could influence where major issuers choose to domicile new gold tokens and related infrastructure.
Conclusion
The FCAs review is less about creating a new crypto asset class and more about deciding how traditional gold markets should plug into blockchain-based infrastructure.
If regulators opt for targeted exemptions or a bespoke regime, tokenized gold could become a more standard form of collateral in Londons wholesale markets, reinforcing the broader real-world asset narrative in crypto.
The real impact for crypto users will depend on how far these reforms extend beyond wholesale institutions, and whether they encourage new, strictly regulated gold-backed tokens that bridge traditional bullion markets and on-chain finance.
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