FCA Drafts Tokenized Gold Rules to Secure London's 70% Global Market Share

Woofun AI reports that the UK's Financial Conduct Authority (FCA) has initiated discussions with banks and industry participants regarding new frameworks for tokenized gold, . The regulator is actively seeking feedback on utilizing these digital assets as collateral within wholesale markets, signaling a move toward formalized oversight.

Structurally, this regulatory push reinforces London's position as the world's largest over-the-counter gold trading hub. According to the World Gold Council, the city accounts for approximately 70% of global notional gold trading volume. A government-backed industry task force stated in July that tokenization could contribute up to 33 billion British pounds ($44 billion) to the UK's annual economic output by 2035.

Woofun AI data shows the strategic roadmap extends beyond precious metals to include the UK's first tokenized government bond by early 2027. The broader plan aims to integrate tokenized securities into core financial functions, specifically enabling their use for trading, settlement, and collateral. This expansion targets the creation of robust tokenized financial markets across multiple asset classes.

The FCA is reportedly preparing to outline new regulatory standards that will govern these emerging instruments. This development marks a critical step in defining the legal parameters for wholesale markets involving digital assets. The outcome will likely set a precedent for how traditional financial hubs adapt to blockchain-based collateral mechanisms.