Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Tokenised Gold Challenges and Opportunities: UK’s FCA Opens Call for Input

Skadden Publication / Fintech Focus

Sebastian J. Barling Kristy Tin Wing Chan Harry A. Ferris

Executive Summary

  • What’s new: The FCA has published a Call for Input on how tokenisation can improve the way gold is traded, mobilised, pledged and held, as well as potential regulatory approaches.
  • Why it matters: Feedback received will likely shape the regulatory framework for tokenised gold and potentially other tokenised commodities.
  • What to do next: Firms active or interested in the gold market should consider responding to the FCA’s Call for Input, particularly where they have views on the classification of tokenised gold products.

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The UK’s Financial Conduct Authority (FCA) has published a Call for Input on gold tokenisation as part of its broader work with the Bank of England on the future of tokenisation in UK wholesale financial markets. The consultation explores how tokenisation can improve the way gold is traded, mobilised, pledged and held as well as potential regulatory approaches.

The Call for Input signals the FCA’s intention to develop a coherent regulatory approach to tokenised gold, addressing key questions around:

  • Product classification
  • Custody and redemption standards
  • Settlement finality
  • Consumer protection

The FCA is considering a range of potential policy responses, from clarificatory guidance to a bespoke regulatory regime. Feedback received will likely shape the regulatory framework for tokenised gold and potentially other tokenised commodities, so firms active or interested in the gold market — including issuers, custodians, trading venues and intermediaries — may want to consider responding to the Call for Input.

Overview and Strategic Context

The objective of this particular consultation is not to extend regulation to parts of the gold trading market currently outside the regulatory perimeter. Rather, it is to build a greater institutional understanding of how tokenisation can improve the way gold is traded, mobilised, pledged and held, whilst maintaining high standards of market integrity and anti-money laundering protections.

The FCA’s focus in this instance is specifically on tokenised products that confer ownership rights in the underlying physical gold and have transparent, consistently evidenced backing with reliable redemption arrangements.

In addition to gathering information on use cases, the FCA also highlights how the advent of tokenisation in gold markets raises important policy questions, including:

  • How tokenised gold products should be classified under existing regulatory frameworks.
  • What impact they may have on market structure.
  • The nature of investors’ rights.
  • The adequacy of custody, redemption and consumer protection arrangements.

By helping to integrate tokenised gold products into the UK’s existing gold trading ecosystem in a way that effectively addresses these concerns, the FCA aims to ensure that London remains at the forefront of the next generation of gold market infrastructure whilst balancing innovation with prudent risk management.

The FCA is not the only regulator to address the opportunities of gold tokenisation and consider potential regulatory responses.

  • Singapore: In January 2026, the Monetary Authority of Singapore (MAS) and the Singapore Bullion Market Association, together with industry participants, established a Gold Market Development Working Group to strengthen Singapore’s gold ecosystem, including through the establishment of services in support of gold market infrastructure and the development of gold-related capital markets products. The impact of this initiative on tokenised gold was highlighted by the chairman of MAS, Gan Kim Yong, at the ninth Asia Pacific Precious Metals Conference in June 2026 shortly after the launch of Singapore’s first tokenised gold offering to retail customers by DBS Bank.
  • Hong Kong: Regulatory authorities have shown a commitment to supporting innovation in the tokenisation of real-world assets. The Securities and Futures Commission of Hong Kong has committed to participate in the Commodity Task Force established by the Government of the Special Administrative Region and develop “regulatory frameworks” for tokenised products, including tokenised gold.
  • Switzerland: Whilst there is no stand-alone statute to regulate tokens, the 2021 Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, otherwise known as the DLT Act, amended financial market and civil law instruments to introduce rules tailored to distributed ledger-based securities that can be traded on licensed distributed ledger technology (DLT) trading facilities. The central principle that has governed the Swiss regulatory approach to tokenised assets, including tokenised gold, is one of technology neutrality. This means the legal treatment of a product will be determined by its underlying economic functions rather than the technical form of the instrument. In circumstances where a tokenised gold product exhibits a transferable right analogous to a traditional security, securities and market-infrastructure rules will be engaged.

Use Cases for Tokenised Gold

The FCA explores how tokenisation could transform the gold market in two main areas: wholesale collateral functions and consumer-facing innovations.

Wholesale Collateral and Settlement

The FCA highlights that tokenised gold could allow institutions to mobilise previously underutilised gold holdings as collateral in securities lending, repo agreements and derivatives transactions. Key potential benefits in these scenarios include intraday mobility, faster settlement, capital efficiency and reduced reconciliation risks.

However, the FCA identifies several legal and regulatory questions that need resolution before this use case can scale, including:

  • The enforceability of token-holder rights over the underlying physical gold.
  • Treatment in insolvency.
  • Settlement finality for on-chain transfers.
  • Reconciliation between on-chain records and custody/vault records.

Prudential treatment of gold tokens is also flagged as an area where targeted clarification could help.

To scale the use of tokenised gold as wholesale collateral, interoperability between traditional and DLT-based systems is also identified as a critical issue. Without common technical and product standards (which the FCA expects to be market-led), fragmented token models could limit liquidity and collateral utility.

The FCA is seeking input on how market-led initiatives could support rigorous standards across areas such as ownership records, token issuance and redemption, asset segregation, audit and cyber resilience, as well as how interoperability should work across ledgers and existing trading, clearing, and collateral-management systems.

Consumer-Facing Innovation

For retail investors, the FCA notes that tokenisation could enhance the experience of gold investment by enabling fractional ownership, faster settlement and cost-efficient trading via mobile apps outside conventional market hours. However, it highlights that regulatory protection and disclosure standards vary significantly across distribution channels for tokenised gold, unlike the well-established exchange-traded fund (ETF) market.

Accordingly, the FCA expects that consumer-facing tokenised gold products should meet minimum disclosure requirements to enable holders to understand, inter alia, safekeeping and insurance arrangements, redemption mechanisms and the consequences if an issuer, custodian, vault, technology provider or intermediary fails.

FCA Potential Policy Responses

The FCA acknowledges that at present, tokenised gold products may fall within scope of multiple regulatory regimes — including the spot cryptoasset regime, certain prudential rules, and collateral eligibility requirements — and that the interaction among these regimes may present challenges for gold tokenisation use cases.

The FCA sees its role as setting clear expectations, addressing regulatory barriers and supporting safe experimentation where appropriate, with the aim of providing strategic clarity and proportionate rules that enable firms to invest and innovate.

In furtherance of this objective, the FCA is considering a range of potential measures, which may be deployed individually or in combination depending on the evidence received from the Call for Input. These include:

  • Evaluating market developments and publishing good and poor practice guidance.
  • Clarifying the application of existing rules and supervisory expectations through published guidance.
  • Developing a recognised “eligible gold token” classification in cooperation with HM Treasury, supported by objective conditions relating to rights, custody, redemption, governance and technology.
  • Assessing the case for targeted rule changes or focused legislative amendments with HM Treasury where existing requirements produce unintended or disproportionate outcomes.
  • Considering whether a bespoke regime for tokenised gold or tokenised commodities more broadly would be necessary and proportionate.

Given that tokenised gold products are still in the early stages of development, the FCA acknowledges that any regulatory approach will need to remain sufficiently flexible to adapt as market structures evolve. While the immediate focus is on tokenised gold, the insights gained from the Call for Input are expected to inform broader thinking on the regulatory approach to other tokenised commodities.

Concerns in Relation to the CIS and AIF Perimeter

The FCA notes that industry participants have raised concerns in relation to the potential classification of certain tokenised gold products as collective investment schemes (CIS) or alternative investment funds (AIF), which may act as a barrier to adoption. Such classifications would trigger requirements relating to disclosure, authorisation, distribution and supervisory oversight, and could limit the range of investors able to access these products.

The FCA acknowledges the importance of providing regulatory certainty in this area, particularly where tokenised gold is being developed for use within market infrastructure and a high degree of certainty around prudential treatment and the ability to exchange tokens as collateral is essential.

Engagement with firms and feedback received through the FCA’s Call for Input on tokenisation in UK wholesale financial markets has underscored that clarity on the regulatory perimeter could be critical to the progression of projects and the commercial viability of tokenised gold.

Policy responses under consideration include:

  • The issuance of supervisory communications clarifying the existing perimeter and the FCA’s expectations.
  • Collaboration with HM Treasury to evaluate and potentially introduce targeted exemptions from the CIS and AIF perimeter for certain tokenised gold products or gold market infrastructure.
  • Further engagement with industry groups on proposed structures that may fall outside existing definitions.

In each case, any alternative framework would need to preserve robust standards of investor protection, market integrity and operational resilience, addressing matters including the legal nature of holders’ interests and the quality and custody of the underlying gold.

Final Thoughts

Although this Call for Input is focused on gold, many of the questions it raises are relevant to the tokenisation of other real-world assets. As such, this initiative represents an important opportunity for market participants to help shape the UK’s regulatory regime for tokenised assets, the development of which will likely be of wider market significance.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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