Tokenized gold rules are under review as the Financial Conduct Authority weighs how such assets could be used in UK wholesale markets, according to a Financial Times report published Monday. The report said the FCA has spoken with banks about possible standards. It also said an announcement could come in the next few months.
The issue centers on collateral. The FCA and the Prudential Regulation Authority are reviewing whether tokenized gold should qualify as margin for uncleared over-the-counter derivatives. If approved, those tokens could sit alongside cash and government bonds in daily margin calls.
Tokenized Gold Rules in Public Review
The broader review is already public. On May 18, the FCA and the Bank of England issued a joint call for input on tokenized collateral eligibility. That paper said tokenized money market funds and tokenized gold may offer benefits as collateral for uncleared OTC trades, although standards still need to be developed with the industry.
Responses to that paper closed on July 3. The Bank said it would publish further policy later this year on how tokenized collateral could work under current rules. Meanwhile, a discussion on assets already accepted by clearing houses under UK EMIR is due in the third or fourth quarter.
Simon Walls, the FCA’s executive director of markets, said when the paper came out that tokenization could transform wholesale markets. The FCA and the Bank of England plan to complete a roadmap by year-end. They also plan to consult on most rule changes in 2027. Separately, the FCA finalized rules for fund tokenization in April.
London Gold Trade Stays in Focus
FinanceMagnates said it could not verify the FT account of private talks. It also noted that neither authority has issued a consultation focused only on bullion, and the May paper gave no date for gold-specific standards.
London remains central to the market. The World Gold Council says the city handles about 70% of global gold trading volume. More than $160 billion a day traded in the loco London market in 2025.
Hong Kong started trial operations of a government-owned gold clearing house on July 7. It uses unallocated accounts, which also clear more than 90% of wholesale loco London trading. One person cited by the FT said Shanghai wants to become the wholesale hub for the gold market.
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Source: Finance Magnates
