UK’s bold new crypto rules promise to unlock global trading, but huge compliance hurdles still threaten the rollout

“The existing AML registration process with the FCA, which is much narrower, is already incredibly demanding, with the FCA rejecting or forcing the withdrawal of over 85% of applications,” he said in an emailed comment. The new framework introduces substantially broader requirements covering Consumer Duty, prudential standards, operational resilience and senior management accountability.

Cattee also cautioned firms against delaying applications, pointing to MiCA’s rollout in Europe, where many firms waited until deadlines approached, creating licensing bottlenecks that left some businesses without authorization in time.

For institutional investors, however, the new framework represents more significant than just another crypto rulebook.

Sandy Jones, director of digital assets at Baillie Gifford, said regulation does not automatically make crypto safer but provides the legal certainty and standards of governance needed for traditional financial (TradFi) institutions to adopt blockchain-based infrastructure.

“The underlying technology is powerful, but it does not create a direct path into mainstream financial markets on its own,” Jones said. “You need legal clarity, operational resilience, proper governance and rules that investors and institutions can recognise.”

Jones also welcomed the FCA’s recent refinements to its stablecoin regime, arguing they create robust settlement infrastructure without imposing unnecessary operational friction.

The industry’s responses suggest the FCA has deliberately positioned the U.K. as a commercially pragmatic alternative to Europe’s MiCA regime. But whether that translates into firms choosing Britain over other jurisdictions will depend less on the framework’s ambition than on how predictably it is implemented over the coming months.