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    3. London Controls 70% of Gold Trading, UK Moves to Regulate Tokenized Gold! FCA Proposes New Regulations

    London Controls 70% of Gold Trading, UK Moves to Regulate Tokenized Gold! FCA Proposes New Regulations

    By: rootdata|2026/08/12 12:50:12
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    London Controls 70% of Global Gold Trading, FCA Begins Research on Tokenization Rules

    According to the Financial Times, the UK's Financial Conduct Authority (FCA) is drafting regulations related to gold tokenization, aiming to promote the digitization of the gold market through blockchain technology while maintaining London’s leading position in the global gold trading market. The FCA has begun engaging with financial institutions to discuss regulatory approaches for tokenized gold and the future applications of related products in the wholesale financial market.

    London has long been one of the most important gold trading centers globally, with its over-the-counter (OTC) market currently accounting for about 70% of the global nominal gold trading volume. As markets like China continue to expand their gold trading and infrastructure, the UK is also considering how to leverage financial technology to enhance market efficiency and competitiveness.

    The FCA is currently focusing on the development of tokenization and digital assets, including emerging applications like tokenized gold, and plans to announce further policy directions. Discussions are primarily centered on the wholesale financial market and how tokenized assets can integrate into existing financial infrastructures.

    Physical Gold on the Blockchain, Tokens Expected to Become Collateral in Financial Markets

    Tokenized gold is typically backed by physical gold held by issuers, who then issue digital tokens on the blockchain representing ownership or related rights to the gold. Investors can transfer and trade through these tokens while gaining exposure to assets linked to the price of physical gold.

    The FCA is consulting with financial institutions to assess whether tokenized gold can further serve as collateral in the wholesale financial market. If the relevant systems are implemented, the application of gold may extend from traditional spot and derivative financial products to on-chain financing, collateralization, and settlement activities.

    The regulatory framework still needs to clarify the legal relationship between physical gold and on-chain tokens, including whether reserves are complete, how physical gold is custodied, what legal rights token holders possess, and how to handle customer assets in the event of issuer financial issues. These regulations will directly impact financial institutions' willingness to adopt tokenized gold.

    UK Fully Promotes Financial Tokenization, Estimated to Generate £33 Billion Annually

    Gold is one of the assets of interest in the UK’s financial market digitization plan. In recent years, the UK government has been promoting the adoption of blockchain and distributed ledger technology in the wholesale financial market, hoping to gradually implement digital issuance, trading, and settlement mechanisms for securities and other financial assets.

    The UK government has also proposed a digitization plan for the financial market, aiming to enhance the competitiveness of the financial industry through regulatory and infrastructure reforms. Officials estimate that if these reforms are successfully implemented, they could add approximately £33 billion to the UK’s economic output annually.

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    China’s Gold Market Rapidly Rising, London’s Financial Position Faces Competition

    The UK’s accelerated research into tokenized gold is also related to changes in the global gold trading landscape. London currently still controls about 70% of the global nominal gold trading volume, but China has been continuously expanding its gold trading market and related financial infrastructure in recent years, gradually increasing its influence in the global market.

    The digitization of the gold market may further change the competitive dynamics between financial centers. With physical gold being tokenized for cross-border transfers, collateralization, and settlements, trading activities can more easily cross different markets, and regulatory frameworks, liquidity, and digital financial infrastructures will also influence the direction of funds and trading activities.

    For London, establishing clear rules for tokenized gold can align the existing gold trading market with digital financial infrastructures. The FCA is expected to announce more developments in tokenization regulations in the coming months, with the custody of physical assets, token issuance, trading, and the use of collateral becoming focal points of market attention.

    This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.

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    Contents

    London Controls 70% of Global Gold Trading, FCA Begins Research on Tokenization Rules
    Physical Gold on the Blockchain, Tokens Expected to Become Collateral in Financial Markets
    UK Fully Promotes Financial Tokenization, Estimated to Generate £33 Billion Annually
    thena
    China’s Gold Market Rapidly Rising, London’s Financial Position Faces Competition

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