FCA Expedites Cryptocurrency Application Review Process
In response to ongoing criticism, the Financial Conduct Authority (FCA) of the UK has expedited its review process for cryptocurrency applications, halving approval times and significantly increasing its acceptance rate. The FCA successfully registered five companies, including major players such as BlackRock and Standard Chartered, since implementing these changes in April, according to a report by the Financial Times. Meanwhile, six applications were either denied, withdrawn, or rejected. This new expedited process has raised the acceptance rate to 45%, a notable increase from the previous five years, during which the rate hovered below 15%.
Declining Interest from Crypto Firms
Despite these improvements, interest from crypto firms in entering the UK market has diminished, with applications decreasing from 46 in the year leading up to April 2023 to just 26 by April 2025. In alignment with this trend, approvals fell from eight in 2022-2023 to three in the most recent year, though there has been a recent uptick in applications. All businesses aiming to engage in cryptocurrency activities in the UK have been required to register with the FCA since 2020. They must adhere to strict regulations aimed at curbing financial crimes like money laundering and terrorism financing.
Streamlining the Registration Process
The regulatory body has made significant strides in streamlining the registration process. Data acquired from a freedom of information request by law firm Reed Smith indicated that new entrants to the crypto market are now completing the registration process in slightly over five months on average—dramatically shorter than the 17 months that was common two years prior. This acceleration in approvals aligns with the FCA’s plans to unveil a comprehensive regulatory framework for digital assets by 2026, as UK regulators face mounting pressure to remain competitive against the quicker, more favorable policy developments in the US and EU.
Future Regulatory Framework and Industry Response
The FCA has welcomed a total of 55 crypto companies to its register but continues to exercise caution due to market risks. Unlike the UK, both the US and EU have been quicker to authorize various products, such as Bitcoin exchange-traded funds, thereby facilitating access for retail investors. To assist companies in navigating the registration landscape, the FCA has initiated preapproval consultations with applicants and held seminars to clarify the application expectations. Recently, the FCA launched a consultation aiming to align the regulatory framework for crypto firms with those governing traditional financial institutions while contemplating specific exemptions that cater to the unique aspects of the cryptocurrency sector.
Some industry lawyers and executives suggest that the anticipated implementation of this comprehensive regulatory framework may be causing firms to delay their applications, with hopes that clearer regulations will enhance their operational capabilities in the UK.
