PAX Gold

The Financial Conduct Authority is weighing whether to lift tokenized gold out of the UK's fund rulebook entirely, a move that could change how London's bullion vaults are used. The regulator will set out the idea on Monday, the Financial Times reported, saying it could work with the Treasury on a targeted exemption from the collective investment scheme and alternative investment fund perimeter, covering certain gold tokens or gold market infrastructure. Industry participants had told the FCA that uncertainty over whether tokenized gold falls within those regimes, both of which restrict who can buy them, could hinder its development. The stakes are national: the World Gold Council puts London's share of global gold trading volumes near 70%, while China is building a rival bullion hub and chasing the same flows. Both leading gold tokens are issued outside the UK perimeter, with Tether Gold backing $2.63 billion in distributed asset value and Pax Gold backing $1.87 billion, according to RWA.xyz, while monthly transfer volume reached $3.70 billion for XAUT and $1.61 billion for PAXG, up 10.91% and 14.10% over 30 days. The FCA believes the move could unlock more of London's bullion reserves for use as collateral, and the Bank of England will consult later this year on whether to allow clearing houses to accept tokenized collateral, while also considering adding tokenised assets, including stablecoins, to its Sterling Monetary Framework. FCA officials say no decisions have been made, and whether an exemption reaches retail buyers or stops at the wholesale desks that pledge collateral remains to be seen.