FCA’s Faster Crypto Approvals Clash with Industry’s 2026 Wait

The UK Financial Conduct Authority (FCA) has significantly accelerated its approval process for crypto firms, reducing average processing times by two-thirds since 2023. Previously averaging 17 months, the process now takes just over five months, according to data from FCA filingsUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1]. This reform follows years of industry criticism over the regulator’s slow pace and low approval rates. The acceptance rate for crypto registrations has also surged to 45%, up from less than 15% over the past five yearsUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1]. Since April 2025, the FCA has approved five firms, including major names like BlackRock and Standard Chartered, while rejecting or withdrawing six othersUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1].

The FCA’s reforms include pre-approval meetings and streamlined application guidance to improve clarity for firmsUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1]. However, the number of crypto applications has declined sharply, dropping from 46 in the year to April 2023 to 26 in the year to April 2025. Approvals have also fallen, from eight in 2022–2023 to three in 2024–2025, before a slight rebound in recent monthsUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1]. Industry observers attribute this slowdown to firms delaying submissions ahead of the FCA’s planned 2026 regulatory framework, which aims to provide clearer, consistent rules for digital assetsUK FCA bows to criticisms, promises faster operation^[3]. Brett Hillis of Reed Smith noted that firms may be “pausing to take stock” of how the new rules will shape the marketUK and US Form Crypto Task Force to Shape Global Digital Assets Rules^[4].

The FCA’s updated approach reflects broader efforts to position the UK as a competitive hub for crypto innovation. David Geale, the FCA’s executive director for payments and digital finance, emphasized the regulator’s commitment to “putting resources into this” and “making a conscious effort to speed up authorizations”UK and US Form Crypto Task Force to Shape Global Digital Assets Rules^[4]. The FCA has also invited newly approved firms to share their experiences, with GSR’s Raphael Landesmann highlighting the regulator’s “very considerable efforts” to improve transparencyUK and US Form Crypto Task Force to Shape Global Digital Assets Rules^[4].

Despite the faster approvals, the FCA remains cautious about crypto risks, requiring firms to demonstrate robust anti-money laundering (AML) and counter-terrorist financing (CTF) safeguardsUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1]. The regulator is consulting on whether crypto firms should face the same standards as traditional banks, including governance and consumer protection requirements. Mixed reactions from the industry underscore the tension between regulatory clarity and operational flexibility. While some firms welcome the expedited approvals, others prefer to wait for the 2026 framework to align operations with anticipated rulesUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1].

The UK’s regulatory strides are part of a transatlantic push to shape global digital asset standards. A joint UK-US task force, announced during President Trump’s 2025 state visit, aims to harmonize regulatory approaches and reduce cross-border barriers for firms. This initiative aligns with the FCA’s broader goal of fostering innovation while maintaining market integrity. As the FCA prepares for the 2026 framework, the coming months will test its ability to balance speed, security, and the UK’s ambition to remain a leading financial hub in the digital ageUK FCA Speeds Up Crypto Firm Approvals After Industry Complaints^[1].