FCA explores tokenized gold entering the UK wholesale collateral market, with London accounting for 70% of global trading volume

The UK's Financial Conduct Authority (FCA) is exploring how tokenized gold can be incorporated into the wholesale market, including whether it can be used as collateral. The discussions involve regulatory approaches aimed at the institutional market, with relevant rules expected to be announced in the coming months.

This regulatory discussion comes as London seeks to solidify its position as a global gold trading hub. Data from the World Gold Council shows that London currently accounts for about 70% of global gold trading volume, while Shanghai and Hong Kong are vying for a larger share of wholesale business. HSBC launched a tokenized gold product for retail investors in Hong Kong over two years ago and reported that the cumulative trading volume has exceeded $2.2 billion, with more than 276,000 transactions. The FCA does not directly regulate physical gold trading but oversees gold derivatives and publicly traded products in the market.