The Financial Conduct Authority has indicated it will set out its approach to tokenisation, with gold-backed tokens among the first assets in scope. The context is competitive as much as prudential: London clears the majority of global over-the-counter bullion trade, and that flow is built on warehouse receipts and settlement conventions that predate blockchains by a century.
Why gold went first
Gold is the easiest hard asset to tokenise and the hardest to fake at scale. Bars carry serial numbers, refiners are accredited, and vaults already publish holdings. That existing infrastructure means a token can be mapped to a specific bar rather than to a pooled claim, which is why metal-backed tokens have grown faster than most other real-world-asset categories.
The unregulated middle
The awkward part is that the spot bullion market itself is not directly regulated in the way securities markets are. Writing rules for the token while the underlying trades under a voluntary code creates an odd asymmetry, and industry responses have already raised it.
What issuers should expect
The likely requirements are familiar: segregated title to specific metal, independent verification of vault holdings, disclosed redemption mechanics and clear treatment on insolvency. None of that is exotic, and issuers who already publish bar lists and attestation reports will find the transition cheap.
For producer-linked models, where a token traces back to a specific mining operation rather than a vault purchase, the compliance burden runs further up the chain. Licensing, custody at the mine gate and assay documentation all become relevant evidence rather than marketing copy.
The counter-argument is that regulation this early can freeze one design into place before better ones emerge. On balance, a written standard from a credible bullion jurisdiction is worth more to this market than another year of self-certification.
