UK Cryptocurrency Companies Cautious as FCA Accelerates Approvals Before 2026 Regulations

The UK’s Financial Conduct Authority (FCA) has made notable progress in speeding up the approval process for crypto service providers, slashing the average review period by 69% since the 2022/23 fiscal year title1 [ 1 ]. Despite this, the regulator has seen a 43.5% decline in new applications during the same timeframe, with successful approvals shrinking from eight in 2022/23 to just three in 2024/25 title1 [ 1 ]. This pattern highlights a growing reluctance among businesses, who are choosing to wait as they anticipate new regulatory measures.

The industry has welcomed the FCA’s increased efficiency—reducing approval times from 511 days to 158 days on average—as a positive move towards rebuilding trust in the UK’s crypto industry title1 [ 1 ]. Simon Jennings, Executive Director at the UK Cryptoasset Business Council, pointed out that the FCA’s efforts to expand internal expertise and prioritize sector growth have resulted in smoother procedures title1 [ 1 ]. However, the approval rate has dropped from 17.4% in 2022/23 to 11.5% in 2024/25 title1 [ 1 ], with total applications decreasing from 46 to 26 over this period title1 [ 1 ].

Industry voices suggest that the fall in application numbers is due to uncertainty about the UK’s forthcoming regulatory landscape. Brett Hillis, a partner at Reed Smith, observed that some companies may be postponing submissions to avoid having to go through both an initial registration and a full authorisation process once the new rules are implemented title1 [ 1 ]. The FCA has acknowledged this pattern, with sources indicating that the anticipated regulatory overhaul in 2026 is shaping when firms choose to apply title3 [ 3 ].

To address these industry concerns and support a “sustainable and competitive” market, the FCA has recently consulted on baseline requirements for crypto businesses title1 [ 1 ]. The regulator has also rolled out pre-approval meetings and informational webinars for applicants title3 [ 3 ]. Still, Jennings stressed the importance of greater openness and more resources to help ease perceived administrative barriers title1 [ 1 ].

On the world stage, the UK is up against strong rivals such as Singapore and Dubai, which are actively seeking to attract crypto companies title3 [ 3 ]. While the FCA’s quicker approval process is a promising sign, the ongoing drop in applications highlights persistent issues. If the UK wants to maintain its status as a leading global crypto hub, it must strike a balance between firm oversight and adaptability. As Jennings remarked, “If the UK wants to lead, we need to be alive to that competition.” title1 [ 1 ]