The UK Financial Conduct Authority is building a regulatory framework for tokenized gold to allow it to be used as collateral in wholesale markets, signaling stronger institutional adoption of real-world assets on blockchain.

Tokenized gold is created as digital tokens backed by physical bullion held by the issuer, representing ownership rights in the metal.

The framework will define how tokenised gold fits within UK financial and regulatory rules, covering custody, transfer, and compliance requirements.

The push follows a 12-month plan led by the Treasury’s wholesale digital markets chief to accelerate digitization of markets and potentially lift economic output by about 33 billion pounds annually.

Regulators are examining authentication, anti-money laundering controls, investor protections, and the implications for market access and stability.

The aim is to provide clarity for market participants while safeguarding consumers and maintaining financial stability in the tokenised asset space.

This development aligns with ongoing coverage of tokenization in UK markets and its potential macroeconomic impact.

Regulators’ move toward tokenised real-world assets is expected to influence other jurisdictions and spur a global shift toward crypto-enabled infrastructure within traditional markets.

The plan complements broader UK efforts to digitize wholesale markets and modernize issuance, trading, and settlement processes.

The initiative is part of a wider UK strategy to expand tokenized markets, including plans for the first tokenised government bond by early 2027 and potential GDP gains of up to 33 billion pounds by 2035.

The roadmap envisions the first tokenised UK government bond by early 2027 and enables tokenised securities to be traded, settled, and used as collateral.

A government-backed industry task force estimates tokenization could add up to 33 billion pounds to the UK’s annual output by 2035.