Britain's Financial Watchdog Developing Regulatory Standards for Tokenized Gold: Sources

Britain's Financial Watchdog Developing Regulatory Standards for Tokenized Gold: Sources

Britain's Financial Conduct Authority is developing new regulatory standards for tokenized gold products and exploring their potential use as collateral in wholesale financial markets, according to reports.

Britain's Financial Conduct Authority (FCA) has engaged in discussions with financial institutions and market participants regarding prospective regulations for tokenized gold, according to sources.

According to individuals with knowledge of the situation who spoke to the Financial Times, the FCA has been gathering input on how tokenized gold could function as collateral within wholesale markets.

Sources indicate that the regulatory body is getting ready to present proposals for establishing new regulatory standards governing tokenized gold. The FCA has been contacted by Cointelegraph for official commentary regarding this development.

As the global leader in over-the-counter gold transactions, London handles approximately 70% of worldwide notional gold trading volume, data from the World Gold Council shows.

These regulatory discussions are occurring alongside the United Kingdom's wider initiative to grow tokenized financial markets. According to a government-supported industry task force's findings released in July, tokenization has the potential to contribute up to 33 billion British pounds ($44 billion) to the nation's yearly economic output by 2035.

The strategic roadmap additionally envisions launching the United Kingdom's inaugural tokenized government bond before early 2027 and aims to enable tokenized securities to be utilized for trading, settlement and as collateral.