UK Financial Conduct Authority Eyes Tokenized Gold Regulatory Relief

The regulator plans to detail potential changes on Monday, working alongside the Treasury and the Bank of England to determine if tokenized commodities require a dedicated framework. Currently, industry participants report that uncertainty regarding collective investment scheme and alternative investment fund rules restricts investor access to digital gold products. By carving out a targeted exemption, officials hope to simplify the division and transfer of bullion, which remains a physical asset burdened by complex custody requirements compared to electronic securities.

Jon Relleen, the FCA’s director of infrastructure and exchanges, noted that the regulator is assessing whether existing frameworks suit modern gold markets. Beyond simple trading, the Bank of England is exploring whether tokenized assets, including stablecoins, could qualify as collateral under the Sterling Monetary Framework. With London accounting for roughly 70% of global gold trading, authorities believe digital infrastructure could reduce operational friction and the need for excess collateral buffers, ultimately strengthening the competitiveness of the UK’s financial sector.