The UK is accelerating the development of its cryptoasset regulatory framework, with the Financial Conduct Authority (“FCA”) granting approval to ClearToken as the first regulated, centralised cryptoasset clearing house, and the Bank of England (“BoE”) launching a Consultation on a regime for sterling-denominated systemic stablecoins. These developments align with the FCA’s broader proposals in Consultation Paper (CP) 25/40, which aim to regulate cryptoasset activities with a focus on operational resilience, market integrity, and consumer protection.
ClearToken’s platform is designed to enable faster and more cost-efficient settlement for digital assets, while the BoE’s proposals seek to mitigate financial stability risks associated with systemic payment stablecoins backed by sterling.
Key Developments
ClearToken Secures FCA Approval for Regulated Crypto Settlement
ClearToken has become the first FCA-authorised centralised clearing house for cryptoassets globally, launching a platform for institutional digital asset trading and settlement. This milestone reflects the FCA’s commitment to supporting regulated innovation under the Financial Services and Markets Act 2000 (FSMA).
The approval:
- Reduces settlement times from T+2/T+1 to near instantaneous, lowering costs and counterparty risks.
- Supports trading in bitcoin, ethereum, and other assets, with plans for broader adoption among exchanges and brokers.
- Addresses fragmentation in crypto markets, promoting transparency and resilience akin to traditional finance.
Bank of England Consultation on Systemic Sterling Stablecoins
In December 2025, the BoE issued a consultation proposing a dedicated regulatory regime for systemic stablecoins used in payments. Key proposals include:
- Applicability to issuers of sterling-denominated stablecoins where material financial stability risks are present.
- Mandatory 1:1 backing with high-quality liquid assets such as BoE reserves or short-term UK gilts, held in segregated trust arrangements.
- Capital buffers, liquidity requirements and resolution planning tailored to systemic importance.
- Supervision by the BoE, including stress testing and continuity measures. Non-systemic stablecoins would remain under the FCA’s oversight.
These measures aim to ensure that systemic stablecoins can operate safely within the UK payments ecosystem, consistent with the BoE’s financial stability mandate.
Broader FCA Proposals in CP25/40
The FCA’s CP25/40 complements the BoE’s proposals by setting out a comprehensive framework for the regulation of cryptoasset market participants, including trading venues, intermediaries, lending/borrowing platforms, staking services and Decentralised Finance (DeFi) applications. Key elements include:
- Retail access requirements: Firms engaging with UK retail clients may need to establish a UK presence and meet Threshold Conditions under FSMA.
- Senior Management Arrangements, Systems and Controls (SYSC): Enhanced governance expectations, including operational capacity, conflict of interest management, and on-chain monitoring.
- Transparency and execution: Requirements for pre- and post-trade transparency, best execution standards and client categorisation obligations.
- Qualifying Cryptoasset Disclosure Document (QCDD): Mandatory disclosures for asset admission to trading, particularly where retail involvement exists.
- Retail safeguards: Controls around lending, borrowing and staking activities aimed at protecting consumers.
This proposed framework will be underpinned by the creation of new FCA Handbook sourcebooks, including CRYPTO and CRYPTO PRU, alongside amendments to SYSC, COBS, and integration with the Money Laundering Regulations (MLRs), including the Travel Rule and CARF (Crypto-Asset Reporting Framework).
Regulatory Implications and Compliance Lessons
ClearToken’s approval and the BoE’s systemic stablecoin proposals highlight growing opportunities in regulated cryptoasset settlement and payments. However, these advances bring increased compliance expectations and regulatory scrutiny.
Firms must take proactive steps to ensure compliance, including:
- Monitoring developments under the FSMA (Cryptoassets) Regulations 2025;
- Preparing for implementation of the CRYPTO and CRYPTO PRU sourcebooks;
- Addressing obligations under the Market Abuse Regulation (UK MAR) and the proposed Market Abuse Regime for Cryptoassets (MARC); and
- Ensuring robust AML/CTF frameworks that align with extended MLR requirements.
Failure to meet regulatory expectations may lead to authorisation refusal, enforcement action, or exclusion from the UK market. The FCA estimates a net regulatory benefit of £287 million over 10 years from the implementation of CP25/40 proposals, reinforcing the importance of early preparation and compliance alignment.
How Complyport Can Help
Complyport provides expert support for UK crypto regulation, from authorisation to ongoing compliance. Our services include:
- AML/CTF/CPF Risk Assessments and Gap Analyses;
- FCA Authorisation Applications and Threshold Assessments;
- Stablecoin Regime Gap Analyses and Prudential Reviews;
- Operational Resilience and Clearing/Settlement Advisory; and
- Regulatory Guidance and Compliance Advisory Support.
Book a Meeting with a Complyport SME
To learn more and ensure compliance with upcoming crypto-regulatory developments, book a consultation with a Complyport Subject Matter Expert today.
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