The United Kingdom has taken another major step toward establishing a regulated digital asset economy, following the Financial Conduct Authority’s (FCA) approval of ClearToken to operate a settlement platform for cryptocurrencies and tokenized assets. The move positions the London-based company at the center of the UK’s efforts to modernize its financial infrastructure and strengthen oversight of digital markets. Pushes Forward on Digital Assets with ClearToken’s Authorized Payment Institution Status ClearToken’s soon-to-launch CT Settle platform will allow institutional clients to settle trades in cryptocurrencies, stablecoins, and fiat currencies using a delivery-versus-payment (DvP) model. This structure ensures that both sides of a transaction complete simultaneously, reducing counterparty risk and freeing up capital by eliminating the need for pre-funded trading accounts. The system, modeled after CLS in foreign exchange markets, could form the basis for a broader clearing and margining framework for tokenized assets. The FCA’s approval gives ClearToken the status of an Authorised Payment Institution and a registered cryptoasset firm, allowing it to operate under full regulatory oversight. The company plans to seek additional approval from the Bank of England through its Digital Securities Sandbox, which tests blockchain-based settlement models in live markets. The development comes as the UK accelerates its digital asset agenda following years of cautious progress. Regulators have faced criticism from companies such as Consensys, which argued that restrictive oversight has slowed innovation. In response, the government and the FCA have rolled out a series of reforms intended to establish the UK as a global hub for digital finance. The modernization plan introduces new regulated activities for crypto trading, stablecoin issuance, and custody under the FCA’s supervision. The agency requires custodians to hold client assets in segregated wallets and maintain strict Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) standards. UK Regulators Build Next-Gen Finance Infrastructure At the same time, the Bank of England is working on a proposed framework for systemic stablecoins, which would require issuers to back at least 40% of their liabilities with deposits at the central bank and the rest in short-term government securities. The proposal also includes per-holder caps to limit financial risk and protect consumers. The consultation on these rules runs until February 2026, with final regulations expected later in the year. The broader government strategy seeks to digitize the UK’s financial markets, supporting innovations such as 24/7 trading, instant settlement (T+0), and programmable money. Policymakers describe the initiative as an “infrastructure play,” focused on building next-generation finance foundations. The FCA has also lifted its four-year ban on crypto exchange-traded notes (cETNs). This allows trading of Bitcoin and Ether products on UK-recognized investment exchanges under strict rules, with broader regulations due in 2026. Market participants have welcomed the shift. Analysts at IG Group project that the UK’s crypto market could grow by around 20% over the next year as regulatory clarity and new infrastructure, such as ClearToken’s settlement system, take effect. Other firms are also moving to align with the changing environment. Blockchain investment company KR1 recently announced plans to move its stock listing to the London Stock Exchange’s main market, becoming the first dedicated digital asset firm to trade on the LSE’s primary platform. Co-founder Keld Van Schreven described the move as “a starter gun for this new asset class,” reflecting growing institutional confidence in UK digital finance. Meanwhile, the Treasury is advancing its Wholesale Financial Markets Digital Strategy, which includes blockchain-based digital gilts and a Digital Markets Champion to coordinate tokenization efforts across financial institutions. A two-year pilot for tokenized sterling deposits with six major banks, including Barclays and HSBC, is testing distributed ledger technology for faster settlementThe United Kingdom has taken another major step toward establishing a regulated digital asset economy, following the Financial Conduct Authority’s (FCA) approval of ClearToken to operate a settlement platform for cryptocurrencies and tokenized assets. The move positions the London-based company at the center of the UK’s efforts to modernize its financial infrastructure and strengthen oversight of digital markets. Pushes Forward on Digital Assets with ClearToken’s Authorized Payment Institution Status ClearToken’s soon-to-launch CT Settle platform will allow institutional clients to settle trades in cryptocurrencies, stablecoins, and fiat currencies using a delivery-versus-payment (DvP) model. This structure ensures that both sides of a transaction complete simultaneously, reducing counterparty risk and freeing up capital by eliminating the need for pre-funded trading accounts. The system, modeled after CLS in foreign exchange markets, could form the basis for a broader clearing and margining framework for tokenized assets. The FCA’s approval gives ClearToken the status of an Authorised Payment Institution and a registered cryptoasset firm, allowing it to operate under full regulatory oversight. The company plans to seek additional approval from the Bank of England through its Digital Securities Sandbox, which tests blockchain-based settlement models in live markets. The development comes as the UK accelerates its digital asset agenda following years of cautious progress. Regulators have faced criticism from companies such as Consensys, which argued that restrictive oversight has slowed innovation. In response, the government and the FCA have rolled out a series of reforms intended to establish the UK as a global hub for digital finance. The modernization plan introduces new regulated activities for crypto trading, stablecoin issuance, and custody under the FCA’s supervision. The agency requires custodians to hold client assets in segregated wallets and maintain strict Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) standards. UK Regulators Build Next-Gen Finance Infrastructure At the same time, the Bank of England is working on a proposed framework for systemic stablecoins, which would require issuers to back at least 40% of their liabilities with deposits at the central bank and the rest in short-term government securities. The proposal also includes per-holder caps to limit financial risk and protect consumers. The consultation on these rules runs until February 2026, with final regulations expected later in the year. The broader government strategy seeks to digitize the UK’s financial markets, supporting innovations such as 24/7 trading, instant settlement (T+0), and programmable money. Policymakers describe the initiative as an “infrastructure play,” focused on building next-generation finance foundations. The FCA has also lifted its four-year ban on crypto exchange-traded notes (cETNs). This allows trading of Bitcoin and Ether products on UK-recognized investment exchanges under strict rules, with broader regulations due in 2026. Market participants have welcomed the shift. Analysts at IG Group project that the UK’s crypto market could grow by around 20% over the next year as regulatory clarity and new infrastructure, such as ClearToken’s settlement system, take effect. Other firms are also moving to align with the changing environment. Blockchain investment company KR1 recently announced plans to move its stock listing to the London Stock Exchange’s main market, becoming the first dedicated digital asset firm to trade on the LSE’s primary platform. Co-founder Keld Van Schreven described the move as “a starter gun for this new asset class,” reflecting growing institutional confidence in UK digital finance. Meanwhile, the Treasury is advancing its Wholesale Financial Markets Digital Strategy, which includes blockchain-based digital gilts and a Digital Markets Champion to coordinate tokenization efforts across financial institutions. A two-year pilot for tokenized sterling deposits with six major banks, including Barclays and HSBC, is testing distributed ledger technology for faster settlement