UK FCA Discusses Tokenized Gold As Collateral With Major Banks

The UK Financial Conduct Authority is discussing how tokenized gold could be used as collateral in UK wholesale markets, including for uncleared over-the-counter derivatives, as Britain seeks to bring digital versions of the precious metal into mainstream finance.

“The Financial Conduct Authority is exploring how tokenized gold could serve as collateral in UK wholesale markets”

DailyCoin

The Financial Times reported that the FCA is examining how digital representations of physical gold could be used in wholesale markets, and the discussions build on a May 18 policy paper published jointly by the FCA, Bank of England and Prudential Regulation Authority.

BigGo Finance

That May 18 joint paper identified tokenized assets including gold as potential collateral for uncleared over-the-counter derivatives, and it said the approach under discussion would adapt existing wholesale-market rules to tokenized assets rather than create a separate regulatory category.

The FCA’s work is also tied to a broader UK tokenization push, with sixteen firms participating in live issuance and settlement experiments through the government-backed Digital Securities Sandbox.

The DailyCoin report also said an announcement on tokenized gold standards could come within the next few months, citing a person familiar with the plans.

The push for tokenized gold standards is framed around London’s dominance in bullion trading, with the Financial Times reporting that London accounts for roughly 70% of global gold trading volume.

The Cointelegraph report said London is the world’s largest over-the-counter gold trading hub, accounting for about 70% of global notional gold trading volume, and it linked the FCA talks to a broader UK effort to expand tokenized financial markets.

Bit2Me News

The roadmap described in the DailyCoin and Cointelegraph reports includes a government-backed industry task force projection that tokenization could add as much as 33 billion British pounds to the UK’s annual economic output by 2035.

Both reports also point to a timeline that includes the UK’s first tokenized government bond by early 2027 and making tokenized securities usable for trading, settlement and as collateral.

In the DailyCoin account, the Bank of England is targeting 2027 for upgrades to its collateral infrastructure and 2028 for a service linking digital-asset ledgers with sterling central bank money.

The UK’s tokenized gold discussions are described as still early-stage, with the DailyCoin report saying the FCA has not yet finalized a regulatory framework for tokenized gold.

“the FCA has not yet finalized a regulatory framework for tokenized gold”

DailyCoin

The Crypto News report said the FCA and Bank of England closed their broader tokenization consultation on July 3, with a response statement during the summer and a full cross authority roadmap later in 2026.

That same Crypto News account said the Financial Times reported that an announcement on developing tokenized gold standards is expected within the next few months, citing a person familiar with the FCA’s plans.

The DailyCoin report also said the FCA is examining how digital representations of physical gold could be used in wholesale markets, including as collateral for uncleared over-the-counter derivatives, and it noted that the PRA has indicated tokenized assets could receive prudential treatment similar to their conventional counterparts.

Separately, the DailyCoin report said the UK already has a precedent for treating tokenized financial assets within existing rules, citing an April policy statement confirming that money market funds, including tokenized versions, can qualify as collateral for uncleared trades under UK EMIR rules.