The UK's Financial Conduct Authority is discussing a regulatory framework for tokenized gold with major banks and other industry participants, according to reporting cited by Wu Blockchain. The move is aimed at modernizing how London's wholesale gold market operates as competition from Asian trading hubs intensifies.
London currently handles roughly 70% of global notional gold trading volume, a dominant position built over more than a century of over-the-counter bullion trading. Regulators appear focused on preserving that lead by giving blockchain-based gold representations a clear legal footing rather than leaving the market to develop informally.
Where the FCA's Authority Actually Starts
Cointelegraph reported that the FCA does not currently regulate trading in physical gold itself, though it does set rules for gold-based derivatives and exchange-traded products — meaning any framework for tokenized gold has to first settle where the regulator's jurisdiction begins. That's a nontrivial question: a token representing an ounce of vaulted gold sits somewhere between a commodity, a security and a payment instrument, depending on how it's structured and traded.
Part of a Bigger Tokenization Push
The gold framework isn't happening in isolation. The FCA and the Bank of England closed a broader consultation on financial market tokenization on July 3, with a published timetable calling for industry workshops, a response statement over the summer, and a fuller cross-authority roadmap later in 2026. Regulators appear to be using gold — a market where London already dominates and has clear incentive to defend its position — as one of the more concrete early test cases for that wider tokenization agenda.
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The timing follows a broader pattern of regulators worldwide moving to give digital-asset frameworks more definition rather than leaving them in a gray zone, a shift that has also shaped how US regulators have approached crypto ETF products this year. Whether the FCA's gold framework ends up treating tokenized bullion as a derivative, a fund unit, or something new entirely will likely determine how quickly banks are willing to build products on top of it.
No specific rules or implementation date have been published yet; the FCA's discussions with banks remain at the framework-drafting stage, with further regulatory detail expected in the coming months.
