ClearToken approved by FCA! The UK's first regulated crypto settlement platform is born.

The UK Financial Conduct Authority (FCA) has approved ClearToken to operate a cryptocurrency and tokenized asset settlement platform, marking another significant step for the UK in establishing a regulated digital asset economy. ClearToken has obtained authorized payment institution status, and its upcoming CT Settle platform will enable institutional clients to settle transactions involving cryptocurrencies, stablecoins, and fiat currencies using a delivery-versus-payment (DvP) model.

ClearToken Achieves Dual FCA Certification

(Source: ClearToken)

The FCA’s approval grants ClearToken both authorized payment institution and registered crypto asset company statuses, allowing it to operate under comprehensive regulatory oversight. This dual certification is rare in the UK fintech sector, as it requires meeting strict regulatory standards for both traditional payment services and emerging crypto assets.

The authorized payment institution status permits ClearToken to provide payment services, money transfers, and payment account management. Obtaining this status requires demonstrating sufficient capital reserves, robust risk management systems, and compliance with anti-money laundering (AML) standards. The registered crypto asset company status allows ClearToken to legally offer services related to cryptocurrencies, including trading, custody, and settlement.

The company plans to seek further approval through the Bank of England’s digital securities sandbox, where it will test blockchain-based settlement models in a real-market environment. The Bank of England’s digital securities sandbox is a regulatory testing environment that enables qualified companies to trial innovative financial technologies under controlled conditions. Participation will allow ClearToken to work closely with regulators to ensure its technical infrastructure meets the Bank’s requirements for systemically important financial infrastructure.

The Threefold Significance of ClearToken’s Regulatory Qualifications

Legal Certainty: As an FCA-authorized entity, ClearToken’s clients benefit from regulatory protections and legal recourse.

Institutional Trust: The dual certification alleviates concerns among banks and asset managers regarding compliance risks.

Systemic Status: Participation in the Bank’s sandbox suggests that ClearToken could become part of the financial infrastructure.

CT Settle Platform Replicates Successful FX CLS Model

ClearToken’s upcoming CT Settle platform will allow institutional clients to settle transactions involving cryptocurrencies, stablecoins, and fiat currencies using a delivery-versus-payment (DvP) model. This structure ensures that both sides of a transaction settle simultaneously, reducing counterparty risk and freeing up capital by eliminating the need for pre-funded trading accounts. The system is modeled after the CLS (Continuous Linked Settlement) platform in the foreign exchange market, serving as a foundation for broader tokenized asset clearing and margin frameworks.

CLS is a critical infrastructure in the global FX market, settling over $5 trillion in daily transactions. It eliminates Herstatt risk (the risk that one party has paid but the other has not received) through multi-currency synchronized settlement. Applying this proven model to the crypto space is a strategic, forward-looking move by ClearToken.

The DvP model is the gold standard for securities settlement. In traditional markets, DvP ensures that securities are delivered only when payment is made, and vice versa, preventing unilateral default risk. Extending this model to crypto and tokenized assets means buyers do not release funds until confirming receipt of assets, and sellers do not transfer assets until confirming receipt of payment. This atomic exchange significantly reduces settlement risk.

Eliminating the need for pre-funded trading accounts enhances capital efficiency. In traditional centralized exchanges, traders must deposit funds in advance, which remain idle until trading. CT Settle’s DvP allows participants to exchange funds and assets only at the moment of trade execution, greatly improving capital utilization. For institutions managing billions of dollars, this efficiency can unlock substantial liquidity.

This system can serve as a foundation for broader clearing and margin frameworks for tokenized assets. As real estate, bonds, equities, and other traditional assets are gradually tokenized, a reliable, regulated, and capital-efficient settlement infrastructure is essential. ClearToken’s early positioning could make it a key hub in this emerging market, similar to CLS’s role in FX.

UK Digital Finance Strategy Accelerates

After years of cautious development, the UK is speeding up its digital asset initiatives, with ClearToken’s approval occurring in this context. Regulators faced criticism from firms like Consensys, which argued that restrictive regulation slowed innovation. In response, the UK government and FCA have introduced reforms aimed at making the UK a global digital finance hub.

This modernization includes new regulated activities such as cryptocurrency trading, stablecoin issuance, and custody, all under FCA oversight. The FCA requires custodians to keep client assets in segregated wallets and adhere to strict AML and counter-terrorism financing (CFT) standards. While these requirements increase compliance costs, they also enhance investor protection.

Meanwhile, the Bank of England is developing a framework for systemic stablecoins, proposing that issuers support at least 40% of liabilities with central bank deposits, with the remainder backed by short-term government bonds. The proposal also includes caps on individual holdings to limit financial risk and protect consumers. Public consultation on these rules will continue until February 2026, with final regulations expected later this year.

Broader government strategies aim to digitize the UK financial markets, supporting 24/7 trading, T+0 settlement, and programmable currencies. Policymakers describe these initiatives as “infrastructure building,” focusing on creating next-generation financial foundations. This strategic positioning aims not only to catch up with the US, Singapore, and Hong Kong in crypto regulation but also to establish a competitive edge.

The FCA has also lifted a four-year ban on crypto exchange-traded notes (ETNs), allowing Bitcoin and Ethereum products to be traded on authorized UK exchanges, subject to strict rules. Broader regulation of crypto products is expected by 2026. The reopening of ETNs offers retail and institutional investors more compliant crypto investment tools, further strengthening the UK’s digital asset market infrastructure.

Growing Institutional Confidence and 20% Market Growth Forecast

Market participants welcome these developments. IG Group analysts predict that, with clearer regulation and new settlement infrastructure like ClearToken, the UK crypto market could grow by approximately 20% over the next year. This forecast considers factors such as regulatory clarity attracting institutional capital, settlement infrastructure reducing trading costs, and stablecoin frameworks providing price stability.

Other firms are adjusting strategies to adapt to the evolving environment. Blockchain investment firm KR1 recently announced plans to list on the London Stock Exchange’s main market, becoming the first dedicated digital asset company to do so. Co-founder Keld van Schreven described this move as “the starting gun for this new asset class,” reflecting growing institutional confidence in UK digital finance.

Meanwhile, the Treasury is advancing its wholesale financial market digitization strategy, including blockchain-based digital bonds and digital market infrastructure to coordinate tokenization efforts across financial institutions. A two-year GBP tokenized deposit pilot involving major banks like Barclays and HSBC is testing distributed ledger technology for faster settlement. The participation of these top-tier banks indicates that traditional finance is actively embracing blockchain technology.

ClearToken’s approval signifies the UK’s strategic positioning in the global digital finance race. As financial centers like the US, Singapore, and Hong Kong accelerate their crypto regulation frameworks, the UK aims to attract more crypto firms and institutional capital by establishing clear standards and reliable infrastructure.