UK FCA explores regulatory exemptions for tokenized gold

The UK Financial Conduct Authority (FCA) is considering regulatory exemptions for certain tokenized gold products to facilitate their use in wholesale financial markets. The regulator is examining whether these digital assets should be exempt from existing collective investment scheme (CIS) and alternative investment fund (AIF) rules.

Working alongside the Treasury and the Bank of England, the FCA is studying a dedicated framework for tokenized gold. The goal is to determine if tokenized bullion can make physical gold easier to divide, transfer, and utilize as collateral. The Bank of England is also evaluating whether tokenized assets, including stablecoins, could qualify as collateral under its Sterling Monetary Framework.

Tokenized gold represents ownership rights over physical bullion held by a custodian, allowing digital tokens to be transferred between investors while the underlying metal remains in storage. Industry participants have noted that current regulatory uncertainty regarding CIS and AIF frameworks may restrict investor access to these products. London, which manages approximately 70% of global gold activity, could see significant impacts from these potential regulatory shifts.