UK FCA considers bespoke rules and fund exemptions for tokenized gold: FT

The United Kingdom’s Financial Conduct Authority (FCA) is reportedly considering whether tokenized gold products should be exempt from some fund rules as part of a broader push to expand tokenization in wholesale markets.

According to a Financial Times report, the FCA is expected to say later on Monday that it is exploring a bespoke regime for tokenized gold, or tokenized commodities, alongside the Bank of England and the HM Treasury. 

The FCA is expected to say tokenization could make gold easier to divide and transfer across digital markets, potentially allowing more of London’s bullion reserves to be used as collateral in financial transactions.

The FT said unnamed industry participants warned the FCA that uncertainty over whether tokenized gold products fall under the UK’s collective investment scheme or alternative investment fund rules could slow development and limit access for some investors.

The FT said the FCA has made no final decision.

The proposals come as UK regulators push to expand tokenization across wholesale markets. The FT said the Bank of England is also considering whether tokenized assets, including stablecoins, could become eligible collateral under its Sterling Monetary Framework.

London remains the world’s dominant over-the-counter gold market, accounting for about 70% of global notional trading volume, according to the World Gold Council.

The UK has also been developing stablecoin rules and testing digital pound interoperability in cross-border payments.

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