Tokenised gold: the FCA is asking whether it is a fund, not whether it is crypto

What was published

On 14 September 2026, the FCA published a Call for Input, Tokenised gold: opportunities and risks for UK wholesale markets, alongside Feedback Statement FS26/1 on tokenisation in wholesale markets. The gold paper exists because respondents to the May 2026 joint Call for Input from the FCA and the Bank of England raised gold unprompted, “given the international strength of the London spot gold trading market”. It asks five questions and closes on 23

October 2026, with responses to tokenisedsecurities@fca.org.uk.

It is worth being precise about the stage this is at. The FCA lists five possible responses—a good and poor practice note, guidance clarifying the existing rules, “Developing a recognised ‘eligible gold token’ classification for specified regulatory purposes”, targeted rule or legislative changes, and a bespoke regime for tokenised gold or tokenised commodities more broadly. Of all five it says they “are not firm proposals and may be used individually or in combination, depending on the evidence received”. Nothing is being consulted on. Evidence is being gathered.

The scope is narrower than the market.

Paragraph 2.4 does quiet but decisive work. The paper, and the policy options it discusses, “concerns only those products that: (i) confer ownership rights in the underlying physical gold; and (ii) have transparent and consistently evidenced backing, clearly defined ownership rights and reliable redemption arrangements”. A token that does not confer ownership of physical metal sitsentirely outside the paper entirely.

The FCA is equally clear about the limits of its ambition: “Our objective is not to regulate the segments of the gold trading market that are currently outside of our regulatory perimeter.” And when it describes the sector's growth it writes, carefully, of “Products that assert to be tokenised gold products”. That phrase is doing more work than its length suggests.

Why the existing market structure is the problem

The case for tokenisation here is not efficiency in the abstract but a specific defect in how gold is held, set out at paragraph 2.9:

• Allocated gold “gives stronger certainty of ownership because specific assets are recorded by the custodian as owned by the account holder”. “But it is slower and more costly to mobilise, making it more difficult to be used as collateral.”

• Unallocated gold “supports liquidity and simpler account-based transfers”. But “it represents a claim on an account provider, introducing counterparty exposure, and so may be less suitable for collateral purposes”.

The perimeter question

Chapter 5 is where the paper stops being about gold and starts being about funds. “A gold token will constitute a CIS if it satisfies the three limbs in the statutory definition”, and for some structures “analysis of the legal and operational structure may not be conclusive”. The AIF definition in the UK's AIFM regulations “overlaps considerably” with it.

The consequences are commercial, not cosmetic. A UCITS scheme “cannot be dedicated to gold”, and a CIS dedicated to gold “may constitute an unregulated CIS, limiting the ability to market the product to consumers or certain classes of investor”. The FCA adds: “The prudential treatment of a token and the ability to exchange it as collateral may also vary depending on whether it is classified as gold or a fund unit.”

The test the FCA describes turns on pooling. “Products that directly represent ownership of an allocated gold bar that can be commercially traded”, where “each investor would have a direct, allocated ownership interest in gold, with no pooling or management of the property as a whole”, are “more likely to fall outside the existing CIS and AIF definitions”. Where “customers hold fractional interests in a single gold bar and the bar is managed or disposed of collectively”, that “would indicate pooling of the form envisaged in the CIS and AIF definitions”.

Between those two poles sits the structure the industry actually wants.

Paragraph 5.13 records that industry groups have proposed tokens representing “a direct co-ownership interest in the relevant allocated gold bar”, resting on “certain UK legislation outside of financial services” that “allows for transfer of ownership in undivided shares of goods” without identifying the specific share transferred. The FCA's response is an open invitation with a sting in it: it is “open to hearing further from firms and industry groups on such arrangements, and the reason why they would not still meet all elements of the CIS and AIF definitions”.

Twelve conditions, not a free pass

Firms reading 5.14 as the FCA leaning towards an exemption should read 5.15 next. Any wider exemption “would need to be limited to products that were more appropriately regulated under a different regime providing more effective protections”, and the FCA lists twelve matters that an alternative regime would have to address. They run from the legal nature of holders' interests, through custody, vaulting and segregation of the metal, reconciliation between physical and on-chain records, and independent audit of that methodology, to dealing arrangements “including where the issuer or an affiliate is the sole liquidity provider”, and orderly wind-down on a potential insolvency.

That is not a lighter regime. It is a differently shaped one, and the FCA says any exemption “would be at the discretion of, and require close engagement with, the Treasury”. This is the single most important planning point in the paper: the decision that matters most is not the FCA's to make.

What an exemption would not do

Paragraph 5.17 is the sentence CASPs should not skip. Even if an exemption from the CIS and AIF regimes were introduced, “firms still need to consider the specific structure of the gold token in question and whether the definition of a ‘qualifying cryptoasset’ (article 88F of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001) may be relevant”.

The fund question and the cryptoasset question are not alternatives: a gold token can escape the first and still meet the second. Run both analyses against the same structure.

What this means for firms

Two hooks are worth using rather than reading. Question 3 asks whether “an appropriately defined set of gold token arrangements” should be regulated outside the CIS or AIF regime, “and, if so, what specific conditions should determine the scope of that exclusion/exemption”. A firm with a live structure has a route to put it in front of the regulator before the position hardens.

Paragraph 5.13 is narrower and even more useful still. The FCA has named the argument it has heard and asked the question it cannot answer on its own—why that structure would not meet every element of the definitions. Answering it well is worth more than a general submission about innovation.

Timeline

• 14 September 2026. Call for Input published, alongside Feedback Statement FS26/1.

• 23 October 2026. Comments close, to tokenisedsecurities@fca.org.uk.

• Later in 2026. Joint FCA and Bank of England Tokenisation Roadmap — not yet published.

• First half of 2027. FCA consultation on safeguarding relevant specified investment cryptoassets.

The case against reading too much into this

A Call for Input is the earliest stage of policy-making. The FCA has listed options and disclaimed them as proposals, the most consequential of those options belongs to the Treasury, and the paper's own scope excludes a good deal of what currently trades under the name. None of that makes it unimportant—the perimeter question is real and the FCA has said clarity on it “could be critical to the development of projects and commercial use of tokenised gold”. It does mean that anyone reading this as a signal that a UK tokenised gold regime is coming has read past the disclaimer.

This note summarises the FCA's Call for Input of 14 September 2026 and quotes it directly where it matters. It is not legal advice.