UK Regulator Eyes New Rules for Tokenized Gold

Britain's financial watchdog is looking at a plan to exempt tokenized gold from restrictive fund regulations. Currently, confusion over whether these digital assets fall under investment scheme rules makes it difficult for companies to issue them in the UK. By creating a targeted exemption, the regulator hopes to modernize how London handles its massive bullion reserves.

London currently holds a dominant position in global gold trading, but face growing competition from international markets. Officials believe that turning physical bars into digital tokens can make the asset much easier to divide and transfer. This change could allow the massive supply of gold stored in London vaults to move more efficiently across digital networks.

For now, the largest gold tokens like Tether Gold and Pax Gold operate outside the UK. If the regulator succeeds, it could bring that activity home and allow banks to use tokenized gold as collateral. The bank is also looking into accepting these assets for funding financial institutions, though officials state that no final decisions have been made regarding retail access.