The lifting of the ban on crypto exchange-traded products for retail investors by the UK Financial Conduct Authority on October 2 was met with anticipation. However, delays in prospectus approvals have pushed back the launch date for Bitcoin and Ethereum-linked products for UK consumers.
According to the Financial Times, the regulator only started accepting prospectuses on September 25, leaving little time for preparation before the expected launch date. This has frustrated industry executives who believe that inadequate preparation time is to blame for the delays. The FCA will take several days to review each company’s prospectus and may request further comments, potentially delaying the launches until at least October 13. Additionally, the London Stock Exchange must also approve the listings, further contributing to the delay.
This marks the first time that UK retail investors can access regulated crypto products since the FCA implemented its ban on crypto derivatives and ETPs in 2021 due to concerns about volatility and fraud.
On the other hand, the FCA has accelerated its review process for crypto approvals, reducing approval times by two-thirds since April. Five firms, including BlackRock and Standard Chartered, have received registrations, increasing approval rates to 45%. The average processing time has decreased from 17 months to just over five months. However, the number of applications has dropped, with companies possibly waiting for the FCA’s full regulatory framework, set to launch in 2026, before pursuing approval.
The FCA now offers pre-approval meetings with case officers and hosts roundtables to clarify expectations around registration processes. A consultation has been opened to apply the same regulatory standards to crypto firms as traditional financial institutions, ensuring alignment with global reporting frameworks by collecting detailed customer information on every trade.
Meanwhile, the UK and US have established a Transatlantic Taskforce for Markets of the Future to strengthen cooperation on digital asset regulation and capital markets. The task force will focus on regulatory framework interoperability, particularly in asset custody, anti-money laundering standards, and stablecoin oversight. This contrasts with the Bank of England’s proposal to impose strict ownership limits on stablecoins, drawing criticism from industry experts.
In addition, the Bank of England Governor has outlined plans to grant widely used stablecoins access to central bank accounts, warning of the potential impact on Britain’s financial system. The global stablecoin market has grown to $300 billion, with a significant boost from the passing of the GENIUS Act in July.
Furthermore, the UK government is embroiled in a dispute with China over the custody of 61,000 Bitcoins seized from a fraud scheme operator. The High Court is deliberating on whether the proceeds should go to the UK Treasury or be used to compensate Chinese victims.
Overall, the lifting of the crypto ban in the UK has opened up opportunities for retail investors, but delays in approvals and regulatory frameworks continue to pose challenges. The industry is eagerly awaiting further developments in the evolving crypto landscape.