FCA Cuts Crypto Approval Times, But Global Rivals Lure Firms with Clearer Rules

The UK Financial Conduct Authority (FCA) has accelerated its crypto registration process, reducing approval times by two-thirds and increasing the acceptance rate to 45% as of April 2025. This marks a significant shift from the previous five-year period, during which the approval rate averaged less than 15%. The FCA’s reforms, including pre-approval meetings and streamlined application guidance, have cut the average processing time for successful applications from 17 months in 2023 to just over five months. David Geale, the FCA’s executive director for payments and digital finance, attributed the improvements to a “conscious effort to put resources into this,” emphasizing the regulator’s commitment to balancing innovation with risk managementUK FCA bows to criticisms, promises faster operation^[1].

Despite these strides, the number of crypto firms applying for UK registration has declined sharply, dropping from 46 in the year to April 2023 to 26 in the year to April 2025. Similarly, approvals fell from eight in 2022–23 to three in 2024–25 before a modest rebound in the past six months. Industry observers attribute this slowdown to firms delaying submissions ahead of the UK’s planned comprehensive crypto regulatory framework, expected in 2026. Brett Hillis, a partner at Reed Smith, noted that while interest in the UK market has not waned, firms are “pausing to take stock” as they await clearer rulesUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[2]. The FCA itself acknowledged that the anticipation of broader regulations is influencing firms’ timing decisionsUK FCA speeds up crypto approvals after criticism^[3].

The FCA’s reforms have included proactive engagement with industry stakeholders to improve application quality. Newly registered firms, such as BlackRock and Standard Chartered, have been invited to share their experiences at workshops, helping to demystify the process for others. Raphael Landesmann of crypto trading firm GSR highlighted the FCA’s “very considerable efforts” in this regard, noting that the regulator’s initiatives have fostered a more collaborative environmentUK Regulator Ramps Up Crypto Approvals As Applications Drop^[4]. However, the FCA’s acceptance rate remains lower than its pre-2020 levels, and the decline in applications raises questions about whether the UK can retain its competitive edge against jurisdictions like the EU, US, and Singapore, which have moved more swiftly to regulate crypto marketsCryptoassets | FCA^[5].

Simon Jennings, executive director of the UK Cryptoasset Business Council, warned that the lingering perception of lengthy approval timelines could deter smaller firms. He emphasized the need for the FCA to further streamline its registration regime to match the pace of global competitors, such as Singapore’s Monetary Authority of Singapore (MAS) and Dubai’s Virtual Assets Regulatory Authority (VARA), which are actively courting crypto businessesSEC and Crypto in 2025: Key Updates You Need To Know^[6]. Meanwhile, former UK Chancellor George Osborne, now an adviser to Coinbase, underscored the urgency of the UK “catching up” to avoid being left behind in the global crypto raceUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[7].

The FCA’s 2026 regulatory framework is expected to address key issues such as market integrity, investor protections, and the classification of crypto assets under existing financial laws. While the regulator has not yet provided a detailed timeline, it has initiated consultations on minimum standards for crypto firms to foster a “sustainable and competitive” sectorUK Regulator Ramps Up Crypto Approvals As Applications Drop^[8]. Industry participants, including BlackRock and Fidelity, have expressed cautious optimism that the framework will provide clarity while preserving innovation. For now, the FCA’s accelerated approval process offers a temporary reprieve for firms seeking UK authorization, but the long-term success of its strategy will depend on its ability to align with the evolving global regulatory landscapeSEC paves way for crypto spot ETFs with new listing …^[9].