RWA: London Prepares Regulatory Framework for Gold Tokenization

Let’s not kill the golden goose. London has dominated the global bullion market for decades, and the City is not about to let blockchain slip through its fingers. The FCA (Financial Conduct Authority, the UK financial regulator) is currently working with major banks on a regulatory framework dedicated to tokenized gold: tokens that represent a right of ownership over physical gold held in custody, transferable digitally via a blockchain, without the metal ever leaving its vault. Key points of this article:

• London has dominated the global gold market, and the City seeks to maintain its supremacy in the face of the rise of tokenized gold.
• The FCA has collaborated with banks to establish a regulatory framework for tokenized gold, crucial in light of growing Asian competition.

London's calculation can be summed up in one figure. According to the World Gold Council, the British capital accounts for about 70% of the global notional trading volume of gold. This position is not eternally secure: several Asian exchanges are developing their own infrastructures for physical and digital gold, and every market that shifts to tokenization without going through London chips away at this historic supremacy. The FCA has therefore engaged in discussions with banks to define how tokenized gold could serve as collateral in wholesale financial transactions, a use that would transform these tokens into building blocks directly usable in the plumbing of the financial system, not just as savings products for individuals. Chris Woolard, appointed Wholesale Digital Markets Champion by the UK Treasury after leading the FCA on an interim basis, quantifies the broader stakes: an accelerated digitization of financial markets could bring up to £33 billion per year to the UK economy by 2035. Tokenized gold is just one piece of the puzzle, but a symbolic piece for a place that has built its reputation on this metal for centuries. More detailed regulatory standards are expected in the coming months, with no firm timeline communicated at this stage.

And London does not really have the luxury of dragging its feet. Geneva and Zurich have long cultivated their own expertise in the physical storage of gold, with Switzerland remaining one of the largest refining centers in the world. Hong Kong and Dubai, for their part, are pushing their own digital trading platforms backed by precious metals, with a simple argument: schedules aligned with Asian time zones, where London markets close just as Asia is barely waking up. The British gamble is to bet on what no competitor has yet: a clearing and settlement infrastructure already proven over decades, which tokenization would modernize rather than replace. However, the window to transform this historical advantage into a technological lead is closing as rival exchanges advance their own pieces.

One detail that the City cannot ignore remains: the market for tokenized gold already exists and has been operating without it for some time. Tether Gold (XAUT) and Pax Gold (PAXG) capture most of the current demand, driven by the growing appeal of the precious metal in times of macro uncertainty. The World Gold Council itself is working on a competing offer called Gold as a Service, a sign that even the historical body of the sector deems it urgent to regain control in this area. A British regulatory framework, no matter how robust, thus arrives after the commercial battle, not before.

This movement is part of a much broader dynamic than just the yellow metal. The tokenization of real-world assets has grown from $2.9 billion in 2025 to $31.9 billion this year, a 589% increase in twelve months, and Citi anticipates a market of $5 trillion by 2030. London is not only looking to protect its gold: it seeks a place in a race for tokenization where every major financial center now wants its ticket to entry.

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