FCA Considers Exempting Tokenized Gold From UK Fund Rules

Britain's Financial Conduct Authority is asking whether tokenized gold belongs inside the rules that govern funds. The regulator said on Monday it is weighing clearer guidance, targeted exemptions or a bespoke regime for gold that trades as a token, work it is doing with HM Treasury and the Bank of England. London clears about 70% of the world's over-the-counter gold trading by notional volume, which is the reason the question is being asked in London at all. Nothing has been decided and no rule text exists. What the FCA has put out is a question.

What the perimeter question actually asks

A tokenized gold product is a digital claim on metal an issuer holds, one token standing for a fixed weight. Whether that claim is a fund is the whole of the problem. Two British regimes could swallow it: the collective investment scheme perimeter, and the alternative investment fund perimeter. Both bring authorisation, custody and reporting duties written for pooled portfolios, not for a receipt against one bar in a vault. The FCA's own wording, as Cointelegraph carried it, is that "uncertainty over whether some tokenized gold products fall under the UK's collective investment scheme (CIS) or alternative investment fund (AIF) perimeter may affect development."

The use the regulator keeps naming is collateral. "Gold tokenisation could make gold easier to transfer and use across digital markets, particularly as wholesale collateral," the FCA said in wording CoinDesk published. The Bank of England is separately assessing whether tokenised assets and stablecoins could count as collateral under the Sterling Monetary Framework, on crypto.news's account. Neither exercise has produced a decision.

Seventy percent, measured two ways

That share is the argument for doing any of this, and it arrives in two shapes. CoinDesk and crypto.news describe it as London's cut of over-the-counter gold trading by notional volume, crypto.news attributing the World Gold Council. CoinGape and The Crypto Times print the same number as a share of global gold trading volumes, with no over-the-counter qualifier. Those are different denominators. No outlet acknowledges the other phrasing, and we could not establish which the FCA itself used. CoinDesk and CoinGape both note China taking share.

The deadline only one outlet carries

Jon Relleen, the FCA's director of infrastructure and exchanges, gave the interview that set Monday's coverage running, speaking to the Financial Times before his own regulator said anything publicly.

"We're keen to understand whether existing regulatory frameworks remain the right fit for gold markets and how innovation could strengthen the efficiency and competitiveness of UK markets," Relleen said.

How long anyone has to answer him is less clear. Cointelegraph puts the consultation deadline at 23 October and is alone in this sweep with a date on it. CoinDesk states that no deadline was given. The Crypto Times says standards are expected in the coming months and that no final decision has been taken. One outlet's date is not a deadline, and the others do not confirm it.

What has not appeared on the FCA's own site

Monday also brought an update on the wider programme. The FCA and the Bank of England took 123 responses to their May call for input on wholesale tokenisation and plan a cross-authority roadmap later this year, with post-trade collateral management named by respondents as the biggest opportunity. That count comes from a Finance Magnates report filed at 11:21 GMT. We checked the regulator's call-for-input page at 15:30 UTC and it still showed only the 18 May document and its 3 July response deadline. The promised response statement was not posted there.

The May paper covered tokenised securities: bonds, equities and fund units. Gold was not in it. Metal is in scope now, and the paperwork that would put it there does not yet exist in public. The cryptoasset authorisation gateway opens on 30 September under final rules with a 2027 start date, and nothing in the gold work is pinned to that timetable. Meanwhile the products trade. Tether Gold and Pax Gold are the two the coverage names, and crypto.news alone puts their combined market capitalisation near $4.4 billion as of July.