UK regulator drafts rules for tokenised gold as collateral
Regulation & Gov ·
The Financial Conduct Authority is building a regulatory framework meant to let tokenised gold function as collateral in wholesale markets, aiming to reinforce London's standing in global bullion trading.
The FCA's approach centers on giving digital representations of physical gold a defined legal and operational status, so institutions can post them as collateral the same way they might use bullion held in vaults or futures positions, according to reporting from the Financial Times. The move comes as tokenisation activity around gold has expanded across several venues and asset classes, with platforms adding gold-linked products tied to trading, lending, and derivatives markets.
That broader push is visible elsewhere in the sector: gold and silver perpetual contracts have each reached peak daily volumes above $7 billion, and platforms have layered leveraged and options-based products on top of metals trading, according to wublockchain.xyz. Separately, tokenised gold products have launched across multiple regions and chains, reflecting a wider effort by exchanges and infrastructure providers to bring bullion exposure on-chain rather than confining it to vault receipts or ETFs.
The underlying appeal for regulators and market participants is gold's traditional role as a monetary asset — scarce, not subject to central-bank issuance, and largely held as reserves, jewelry, or investment bars rather than consumed industrially. Central banks added more than 1,000 tonnes to reserves in both 2022 and 2023, the largest two-year accumulation since the end of Bretton Woods, a trend that has kept institutional demand for gold-backed instruments elevated even as spot prices have swung sharply this cycle. Background on that dynamic and related coverage is tracked under leviathan.news's gold index.
Two sources are tracking this specific development, both describing the FCA's work as preparatory rather than finalized. What remains unclear is the timeline for any formal rulebook, which institutions would be permitted to use tokenised gold as collateral, and whether the framework will set technical standards for custody and settlement or leave those details to individual platforms. How the FCA's approach interacts with existing wholesale bullion clearing arrangements in London is also not yet specified.