Britain’s Financial Conduct Authority is examining whether gold should move onto blockchain-based infrastructure, opening a consultation on the potential use of tokenised gold in UK financial markets.
The FCA said tokenisation could make physical gold easier to trade, transfer, hold and pledge as collateral by creating digital tokens representing ownership of the underlying metal.
The initiative is particularly focused on wholesale markets. London remains the world’s largest centre for spot gold trading, and the regulator wants to determine whether distributed ledger technology could improve efficiency without weakening market integrity or investor protection.
One potentially important use case is collateral. Tokenised gold could be transferred more easily across digital financial infrastructure, allowing institutions to use bullion alongside other tokenised assets in trading and settlement.
The FCA is also examining regulatory uncertainty around whether some tokenised gold products could fall within existing rules for collective investment schemes or alternative investment funds.
The consultation follows broader work by the FCA and Bank of England on tokenisation in UK wholesale markets. Industry respondents to an earlier review specifically highlighted gold as an asset that could benefit from blockchain-based infrastructure.
The regulator said responses could ultimately lead to guidance or even a bespoke regulatory regime for tokenised gold. The consultation closes on October 23.
The move comes as major financial centres increasingly explore bringing traditional assets onto blockchain networks. Stocks, bonds, funds and bank deposits are already being tested in tokenised form, while regulators are considering how existing securities and market rules should apply.
Gold could now become another major asset class in that transition.