What the UK's Tokenized Gold Paper Actually Asks, and the October 23 Deadline

The UK’s financial regulator has asked the market a direct question: should tokenized gold have its own rules?

The Financial Conduct Authority (FCA) published a Call for Input on September 14, 2026. It runs to 14 numbered pages. It is not a rule and not a proposal. It is a request for evidence. Responses are due by October 23, 2026, by email to tokenisedsecurities@fca.org.uk. The FCA’s web page and the paper itself both give that date.

We read the paper. Here is what it says.

Why now

In May 2026 the FCA and the Bank of England asked for views on tokenization in UK wholesale markets. People who replied raised gold specifically, the FCA says. The paper says London’s over-the-counter market is “the biggest for spot gold trading in the world,” and the FCA wants to know whether tokens could build on that.

The FCA says its aim is not to regulate the parts of the gold market that sit outside its reach today. It wants to know whether tokens could improve how gold is “traded, mobilised, pledged and held.”

What the FCA thinks tokens could do

Wholesale collateral. This is the main use the paper discusses. Allocated gold, where specific bars are recorded as the owner’s, is slow and costly to move, so it is hard to pledge. The paper says tokens could let firms use “previously under-utilised gold holdings” as collateral in securities lending, repo, and derivatives.

Settling both sides at once. Today the gold and the cash in a trade settle through separate systems. The paper gives the example of swapping gold tokens for US dollar tokens in one step.

Retail products. The paper says a well-designed token could let people buy and sell gold in an app, in small amounts, outside market hours.

The legal knot: is a gold token a fund?

This is the heart of the paper. UK law has two broad fund definitions that overlap a lot: the collective investment scheme (CIS) and the alternative investment fund (AIF). If a gold token falls into either, the paper says that could trigger extra authorization, distribution, disclosure, and supervision requirements for the firm managing it. The paper says that even uncertainty about the label “may impact the desirability or feasibility” of holding a token for some classes of investor.

The FCA gives two signposts:

• A token that gives direct ownership of an allocated gold bar, with no pooling and no management of the property as a whole, is “more likely to fall outside” the fund definitions.
• If customers hold fractional interests in a single bar that is managed or sold collectively, that points toward pooling, which is what the fund rules were written for.

Industry groups have argued for a middle path, where tokens give direct co-ownership of a share of an allocated bar. The FCA says it is “open to hearing further” on why such structures would fall outside the definitions.

Five possible responses

The paper says these “are not firm proposals.” They could be used alone or together:

1. Watch the market and publish a note on good and poor practice.
2. Clarify how existing rules apply, through guidance.
3. Create a recognised “eligible gold token” classification, with conditions on rights, custody, redemption, governance, and technology.
4. Assess targeted rule or law changes where there is strong evidence that current rules produce “unintended or disproportionate outcomes.”
5. Consider a bespoke regime for tokenized gold, or for tokenized commodities more broadly.

The FCA would lead the first two. The Treasury would share the third and fourth. The fifth would involve the FCA, the Treasury, and the Bank of England. The paper adds that any exemption from fund rules is up to the Treasury.

Twelve things any new regime would have to cover

If some gold tokens are taken out of the fund rules, the FCA says something else has to protect holders. Its list:

1. The legal nature of holders’ ownership rights
2. The nature and quality of the gold
3. Custody, vaulting, and segregation
4. Issuance, redemption, and matching vault records to on-chain records
5. Independent audit and assurance, including of custody records
6. Governance, including control over changes to product terms
7. The gold-price benchmark and how tokens are valued
8. Dealing arrangements, “including where the issuer or an affiliate is the sole liquidity provider”
9. Operational resilience and cyber security
10. Financial crime and market integrity controls
11. Disclosure, especially to retail investors
12. Orderly wind-down, and protection of holders if a firm becomes insolvent

What it says about today’s tokens

The paper names no gold tokens and no token issuers. It notes that products that “assert to be tokenised gold products” have grown a lot in market value and have “driven price discovery on weekends” because they trade longer hours. It also makes two pointed remarks.

First, its policy options cover only products that give ownership rights in physical gold and have “transparent and consistently evidenced backing,” clear ownership rights, and reliable redemption. Tokens that lack those are not what it has in mind.

Second, it compares the field with gold exchange-traded funds, where disclosure is well established, and says “inconsistent practice continues to exist in the tokenised gold space.” It lists what any holder should be able to compare:

• how the gold is kept safe, and any insurance
• whether and how redemption works
• how far the product is regulated and supervised
• the fees and minimums
• what happens if an issuer, custodian, vault, technology provider, or intermediary fails

Our tokenized gold primer checks some of the same things: custody, redemption, fees, and minimums.

The five questions

1. Where are the biggest benefits of gold tokenization for the UK, and what risks come with wider wholesale or retail use?
2. Where does interoperability matter most, and what must be solved for tokenized gold to be trusted as collateral?
3. Should a defined set of gold tokens be regulated outside the CIS and AIF regimes? On what conditions, and with what protections?
4. Where else is more regulatory clarity needed, for retail and for wholesale?
5. How can gold tokenization work alongside other industry and regulatory projects?

What happens next

Nothing changes yet. The FCA says it will review the responses and use them “to shape our future approach,” which may include guidance or considering a bespoke regime for tokenized gold. It gives no timetable beyond the October 23 deadline.

The paper also says its lessons may carry over to the tokenization of other commodities.