Overview
- The Financial Conduct Authority is proposing work with HM Treasury and the Bank of England to test a tailored regime or narrow exemptions that would remove some tokenized gold products from existing collective investment scheme and alternative investment fund rules.
- The Bank of England is advancing work to decide whether tokenized assets, including gold-backed tokens and stablecoins, can qualify as collateral for its Sterling Monetary Framework and plans a consultation on central counterpartaries accepting such assets.
- Tokenized gold products already operate in markets and are being used as collateral on lending platforms, with issuers including Tether and Paxos and borrowers using protocols such as Aave and firms like Arch Lending.
- Regulators say tokenization could make physical bullion easier to split, transfer and settle electronically, which may reduce operational barriers that now keep large gold reserves idle in traditional custody chains.
- Any change to the rules is not final and will require further work on custody standards, settlement processes and coordination between the FCA, Treasury and prudential authorities before tokenized gold can enter mainstream wholesale use.