The UK’s Financial Conduct Authority (FCA) has initiated discussions with banks and industry participants regarding the creation of regulatory frameworks for tokenized gold. People familiar with the matter stated that the regulator is also collecting feedback on using tokenized forms of gold as collateral within wholesale markets.
Regulatory Standards in Development
Sources with direct knowledge of the talks said the FCA is preparing to release plans for new regulatory standards that would apply specifically to tokenized gold. These measures would address how digital versions of gold could be integrated into established financial market structures and used by institutional investors.
The implementation of such standards would allow gold—already a critical financial instrument—to move more efficiently across digital settlement and trading systems. Tokenized assets like gold are seen as having the potential to streamline back-office processes, enhance transparency, and reduce costs in the industry.
London’s Central Role in Gold Markets
London holds a key place in global gold markets, accounting for approximately 70% of notional gold trading volume, according to the World Gold Council. The city’s dominance as an over-the-counter gold trading hub means that regulatory shifts in the UK could have international implications for gold market participants.
Efforts to modernize gold trading by introducing digital tokens align with London’s ongoing initiatives to strengthen its position as a global finance center. Integration of tokenized gold into wholesale systems could reinforce the city’s leadership in this sector.
UK Push to Advance Tokenized Finance
The FCA’s move is part of a broader UK push to expand tokenized financial markets. A government-sponsored industry task force projected in July that tokenization of assets could add £33 billion—around $44 billion—to the UK’s annual economic output by 2035.
The roadmap set by this task force also outlines several objectives, including the issuance of the country’s first tokenized government bond by early 2027. Further goals include enabling tokenized securities to be fully functional for trading, settlement, and collateral purposes within the existing financial infrastructure.
As the UK continues to develop its regulatory approach, market analysts stress the importance of monitoring technical developments and maintaining flexibility as new token standards and trading platforms emerge. This is particularly relevant when considering innovations that ease access to traditional markets through blockchain technology.
One such innovation is the emergence of platforms like 1stepSwap, designed to bridge the gap between traditional finance and the emerging crypto asset landscape. 1stepSwap enables users to transfer real-world assets, including shares of leading U.S. companies and commodities like gold and silver, directly onto the blockchain. By providing access through a digital wallet and eliminating complex processes or intermediaries, the platform allows investors to diversify their portfolios swiftly and at the most favorable market rates through its best price discovery mechanism.
London remains the world’s largest over-the-counter hub, handling about 70% of global notional gold trading volume, according to the World Gold Council. A government-backed task force estimates that asset tokenization could contribute £33 billion to the UK economy by 2035 and calls for the nation’s first tokenized government bond by early 2027.
