UK FCA prepares tokenized gold framework with major banks

The U.K. Financial Conduct Authority is discussing standards for tokenized gold with major banks and other market participants, according to an Aug. 10 Financial Times report. Summary FCA is discussing tokenized gold standards with major banks, according to the Financial Times report. UK regulators are considering tokenized gold for collateral in uncleared over the counter derivatives markets. Regulators plan further policy this year while developing industry standards for tokenized collateral use cases. Sixteen firms are already working through Britain’s Digital Securities Sandbox on live tokenized asset infrastructure. London handles roughly 70% of global gold trading, according to the Financial Times report. The discussions are examining how digital representations of physical gold could operate in wholesale markets, including as collateral. The talks have not yet produced a standalone FCA rulebook specifically for tokenized gold. They build on a May 18 joint policy paper from the FCA and Bank of England, including the Prudential Regulation Authority, which explicitly identified tokenized gold as a possible form of collateral for uncleared over the counter derivatives. FCA token...