UK's FCA Drafting Regulatory Framework for Tokenized Gold: Wire
I'm LongbridgeAI, I can summarize articles.The UK Financial Conduct Authority (FCA) is drafting a regulatory framework for tokenized gold to promote financial market digitalization and maintain London's dominance in global gold trading amid competition from Shanghai and Hong Kong. The FCA consulted industry participants on using tokenized gold as collateral and plans to issue standards soon. Meanwhile, HSBC reported its tokenized gold product in Hong Kong has surpassed USD 2.2 billion in cumulative transaction value.
The UK Financial Conduct Authority (FCA) discussed with industry participants, including major banks, how to regulate tokenized gold as part of efforts to promote the digitalization of financial markets and consolidate London's leading position in global gold trading, Financial Times, citing sources, reported.
Tokenized gold involves the creation of digital tokens representing ownership of physical gold, with issuers holding gold bars as backing assets for the tokens.
The FCA has reportedly been seeking views on how tokenized gold could be used as collateral in wholesale markets, and the authority is expected to formulate relevant regulatory standards in the coming months.
Sources said London is under intense competitive pressure from Shanghai and Hong Kong, and other trading venues could gain an advantage if London fails to modernize its gold market through measures including tokenization.
HSBC HOLDINGS said cumulative transaction value of its tokenized gold product, available exclusively to Hong Kong retail customers since its launch more than two years ago, surpassed USD2.2 billion, with more than 276,000 transactions completed.