The Financial Conduct Authority is consulting with banks on regulatory standards for tokenized gold, with an announcement expected within months, the Financial Times reported Monday. The critical issue for brokers and liquidity providers centers on whether tokenized gold will qualify as eligible collateral for margin calls on uncleared over-the-counter derivatives, potentially placing it alongside cash and government bonds rather than treating it as just another client product.
The FCA and Bank of England publicly flagged this review in May, seeking industry input on tokenized collateral eligibility including gold and money market funds. While the FCA already regulates gold derivatives and exchange-traded products, it does not oversee physical gold trading. A final roadmap is due by year-end, with formal rule consultations planned for 2027.
The timing is significant as London defends its dominance of roughly seventy percent of global gold trading volume worth over one hundred sixty billion dollars daily, while Hong Kong launched a competing government-backed gold clearing house in July using the same unallocated account structure that clears most London wholesale trades.
FXnCO Insight
Brokers should monitor upcoming FCA standards closely, as tokenized gold collateral approval could unlock significant margin efficiency and reshape OTC derivatives workflows before 2027 implementation.
Source: Finance Magnates