📰 What has happened
The Financial Conduct Authority (FCA), the financial regulator of the United Kingdom, has been under criticism for delays, low approval rates of applications from crypto companies, and as a result has decided to expedite the registration/approval process.
Since April 2025, the FCA has approved five applications from crypto companies (including BlackRock and Standard Chartered), while previously the approval rate was very low (less than 15%). Now the rate is approximately 45%.
It also significantly reduced the average processing time of applications: from about 17 months to just over 5 months now.
To achieve this, the FCA has put more resources, offered pre-application meetings, educational events, etc., in order to help applicants meet requirements, which also improves the quality of applications.
✅ Why this is not a bad thing
These are some reasons why this acceleration is something positive and quite normal in economies that want to foster innovation:
1. It allows the crypto sector not to stagnate
If regulators are excessively slow, companies become disincentivized, preferring to move operations to other jurisdictions with faster permits. Accelerating may avoid that and keep the UK competitive.
2. Better regulatory clarity encourages investment
Knowing that there is a more efficient and predictable process reduces the perceived risk for investors and companies. It improves the environment for new companies to enter the market, test products, etc.
3. Protection + security are not necessarily compromised
According to the report, even if the process is accelerated, the FCA indicates that it will not lower its standards for safety, compliance, or consumer protection. In other words, they seek speed without skipping important controls.
4. Reflects institutional learning
Criticism has served to adjust processes. The fact that it is recognized that the previous system was too slow, and that it is being corrected, shows adaptability — something healthy in the regulation of highly dynamic sectors like crypto.
5. Benefit for end users
If more crypto companies achieve registration, more services may become available, better competition, tighter prices, greater product innovation, better infrastructure (e.g., exchanges, custody, staking, etc.).
⚠️ What remains to be monitored / the risks
Although the improvement is good, there are some points that your friend should know to have a realistic view:
Although the approval rate has increased, the number of applications has decreased: there were many companies applying before, now fewer — perhaps because several withdrew due to the complexity of the process.
There is a risk that accelerating too much may cause errors: if applicants do not understand all regulations, if AML/KYC controls are not well fulfilled, there may be compliance risks, sanctions, or reputational failures.
The entire regulatory framework is still not complete: new broader rules are expected to come into effect ('gateway' for trading, exchanges, staking, stablecoins, etc.), but some will take effect in 2026 or other timelines.
For individual investors, there is still risk if they use unregulated services, or if regulated companies are just adapting controls. Accelerating does not guarantee that all collateral issues are resolved.
