UK’s FCA Accelerates Crypto Licensing Amidst Global Competition

Regulatory authorities in the UK are enhancing their approach to cryptocurrency oversight, streamlining the licensing process for crypto firms. The Financial Conduct Authority (FCA) has significantly reduced approval times and improved the overall licensing experience to foster UK’s competitive edge in the global crypto market.

Key Takeaways

The FCA is speeding up the registration process for crypto companies, reducing approval times from an average of 17 months to just over five months.
Approval rates have risen significantly, reaching approximately 45% since April 2023.
Efforts to improve the application process include increasing staff, holding pre-application meetings, and offering clearer guidance.
The UK is planning to implement full crypto regulation, targeting 2026 for new comprehensive standards.
Coordination with U.S. regulators is being pursued for better oversight and access to markets.

UK’s FCA speeds up crypto licensing as global competition heats up - 1

FCA Speeds Up Crypto Licensing

Regulatory bodies in the United Kingdom aim to change their image of being slow in crypto regulation. The Financial Conduct Authority (FCA) is accelerating the registration process for cryptocurrency companies following criticism that license approvals were taking over a year. A report by the Financial Times on September 22 revealed that the average processing time for applications has dropped from 17 months to just over five months.

Additionally, the FCA has seen a substantial increase in approval rates, which have climbed to around 45% since April, compared to less than 15% in the previous five years. To achieve this, the FCA has expanded its workforce, introduced pre-application meetings, and provided clearer guidance to streamline the review process.

Despite a decline in total applications due to past inefficiencies, there has been a recent uptick in successful registrations. Notable firms like BlackRock and Standard Chartered have reportedly gained approval to operate in the UK.

The FCA is also enhancing its outreach to applicants by offering pre-approval meetings and organizing roundtables and webinars to clarify requirements. According to FCA executive director for payments and digital finance, David Geale, these initiatives have led to better-quality applications and expedited approvals while maintaining the agency's rigorous standards.

Laying the Groundwork for Comprehensive Crypto Regulation

The rapid approval process initiated by the FCA is part of a larger strategy to adopt a proactive stance towards the crypto industry and strengthen the UK's position in the global marketplace. Recently, the FCA launched a consultation to extend full regulatory oversight to crypto-asset businesses by 2026, aiming to enhance governance and outline a structured operational framework.

Under this proposal, crypto firms will be required to comply with the Senior Managers and Certification Regime, operational resilience standards, and strict financial-crime prevention regulations similar to those applied to banks and brokerages. This initiative seeks to ensure that service providers operate securely and fairly while holding them accountable to their customers and offering more transparent pathways for resolving regulatory issues.

These steps build on draft legislation presented by HM Treasury earlier this year, which would empower the FCA to regulate trading platforms, custody services, and staking operations.

In addition to national reforms, the UK is aiming to improve regulatory collaboration with the United States. High-level discussions between UK Chancellor Rachel Reeves and U.S. Treasury Secretary Scott Bessent have reportedly focused on joint oversight of stablecoins, shared regulatory sandboxes, and facilitating smoother access for UK crypto firms to U.S. capital markets.

Ultimately, these ongoing efforts underscore the FCA’s commitment to cultivate the UK crypto market and maintain London’s stature as a premier global hub for the industry.