FCA eyes tokenized gold rules; City of London still runs 70% of the OTC shine ✨

The UK's Financial Conduct Authority has held discussions with banks and industry participants over a potential regulatory framework for tokenized gold, according to people familiar with the matter who spoke to the Financial Times. The regulator has also sought feedback on whether tokenized gold could be used as collateral in wholesale markets and is preparing to outline plans for new standards.

The move comes as London continues to dominate physical gold trading, accounting for roughly 70% of global notional gold trading volume in the over-the-counter market, according to the World Gold Council. Cointelegraph has approached the FCA for comment.

The tokenization push sits inside a wider government-backed effort to expand on-chain financial markets. A July report from an industry task force estimated that tokenization could add as much as 33 billion British pounds ($44 billion) to UK annual economic output by 2035. The same roadmap calls for the UK's first tokenized government bond by early 2027 and aims to make tokenized securities usable across trading, settlement and collateral workflows.

Officials have framed the consultation as groundwork for rules that would govern issuance, redemption and the use of tokenized gold in wholesale market plumbing, though no draft text has been published. Industry participants in the talks include bullion banks and custodians operating in the London market, the FT reported.