UK’s FCA cuts crypto approvals time by 70%, aiming for efficient regulation as firms await clearer 2026 rules amid fewer applications.
The United Kingdom has reduced the time it takes to approve crypto registrations, with regulators signaling a more efficient process. The Financial Conduct Authority confirmed that the average wait time has dropped by 69% since 2023. This development comes as part of a bigger plan to create a supportive but cautious environment for crypto activity in the country. However, the number of new applications has been falling in the same period.
Crypto Firms Wait for 2026 Rules as UK Applications Fall
Reed Smith, an international law firm from London, revealed the data through a freedom of information request. According to the FCA, applications from cryptoasset service providers have declined by 43.5% in the last two years. These providers consist of exchanges and companies that provide related services. The more rapid approvals by the regulator may not be sufficient to boost interest currently, as firms wait for better rules.
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The FCA’s move is part of an overall effort to close the gap with other regions. The European Union has moved forward with its crypto rules with MiCA, and there has been more enforcement-led oversight in the United States. In order to attract international business, the UK has started offering pre-approval meetings, where firms can go to see what the requirements are before submitting applications. This shift is aimed at reducing confusion and making compliance more direct.
Industry lawyers and executives say another factor is influencing the decline in applications. Many firms are awaiting the 2026 regulatory framework that is expected to give more clarity. By holding off, though, firms may be better able to bring operations closer to the new rules. This approach also saves costs by avoiding repeated changes to compliance strategies before rollout.
FCA Aims to Modernize Rules as UK Competes in Global Crypto Race
Despite the speedier process, the FCA is continuing to point out risks associated with the crypto sector. The regulator wants firms to demonstrate robust protections against money laundering and terrorist financing. It also emphasizes that crypto companies are subject to standards used for traditional financial institutions. At the same time, the FCA has mentioned that it may introduce carve-outs that take into consideration the unique features of digital assets.
Observers consider this balance to be critical. Faster approvals help spur innovation and stricter oversight helps protect consumers and markets. Still, reactions to the new process have been mixed. Some businesses view the reduced wait time as evidence of the FCA’s desire to help the industry. Others are wary and would rather wait to enter until the 2026 framework gives them a more clear and stable environment to operate in.
In the broader scheme of things, the FCA’s new approach is an indication of how regulators are adapting to the speed of digital finance. The focus on efficiency may make the UK more competitive, but fewer applications show people want long-term clarity to build trust. As 2026 gets closer, there will be a lot of eyes on the market to see how many companies adapt rapidly and how many hang back and face liquidation risks if compliance costs remain too high.
