UK FCA seeks input on tokenized gold

TLDR

The UK Financial Conduct Authority (FCA) is consulting on tokenized gold, including possible exemptions from fund rules to support its use as wholesale collateral in financial markets.

1. The FCAs call for input focuses on physically backed gold tokens, their regulatory classification, and runs until late October 2026.
2. Changes could unlock Londons huge bullion market for tokenized gold and intersect with broader tokenization and stablecoin regulation.
3. The outcome will hinge on industry feedback and a forthcoming FCA and Bank of England roadmap for wholesale tokenization.

Deep Dive

1. Scope Of The Tokenized Gold Consultation

The FCA has published a call for input on tokenized gold products that represent ownership of physical bullion with transparent backing, clear legal rights, and reliable redemption mechanisms. The consultation asks whether some of these tokens should sit outside the UKs collective investment scheme (CIS) and alternative investment fund (AIF) rulebook, or be given a bespoke classification for regulatory purposes. It is open until 23 October 2026 and explicitly targets wholesale markets, where gold is traded, pledged, and held as collateral, rather than retail speculation. Regulators note that uncertainty over whether gold tokens are treated like funds can restrict which investors can hold them and slow development of new products.

2. Why This Matters For Crypto And RWAs

Tokenized gold gives a blockchain claim on bars held in vaults, similar in spirit to existing gold-backed tokens such as Tether Gold (XAUT) and PAX Gold (PAXG), though those are issued outside the UK. London handles about seventy percent of global over the counter gold trading, so making its bullion easier to tokenize and use as collateral could be significant for the real world asset segment. The FCA, Treasury, and Bank of England are also exploring whether tokenized assets, including stablecoins, can be used as eligible collateral at central banks and clearing houses, which would bring regulated digital gold and regulated crypto into the same collateral ecosystem.

3. What To Watch Next

The FCA has not made any decisions and remains open to several outcomes, ranging from simple guidance to targeted rule or legislative changes, or even a bespoke regime for tokenized gold and other commodities. In parallel, the FCA and Bank of England received 123 responses to their wider wholesale tokenization consultation and plan to publish a tokenization roadmap later in 2026, covering workstreams for tokenized assets, collateral, and settlement. For crypto users and projects, the key signals will be whether gold tokens gain a clearer, non fund regulatory category, whether they are explicitly recognized as wholesale collateral, and how far any regime extends toward stablecoins and other tokenized RWAs.

Conclusion

The FCAs move to seek input on tokenized gold is another step in the UKs broader strategy to bring tokenized assets and crypto into mainstream financial infrastructure. If regulators resolve fund rule uncertainty and open the door to gold and possibly stablecoins as recognized collateral, Londons bullion and digital asset markets could become more tightly linked, with on chain gold playing a larger role in institutional finance.