FCA Approves ClearToken’s Regulated Crypto-Fiat Settlement Platform, Boosting UK’s Digital Asset Goals

London-based digital financial infrastructure firm ClearToken has secured UK Financial Conduct Authority (FCA) authorization to launch CT Settle, a regulated Delivery versus Payment (DvP) platform for digital assets, stablecoins, and fiat. The approval, announced this week, is a key step for the firm and the UK’s broader strategy to integrate crypto into traditional finance—now a priority amid global competition to set clear digital asset regulatory frameworks.

Under the authorization, ClearToken’s settlement arm (ClearToken Depository Limited) gains dual regulatory status: it is classified as a Payment Institution under the UK’s 2017 Payment Services Regulations (governing payment-handling firms) and registered as a crypto asset firm under the country’s anti-money laundering (AML) laws. This dual designation ensures compliance with both traditional financial standards and the FCA’s strict crypto rules, including customer due diligence and transaction monitoring.

“These dual permissions let us run a fully regulated DvP system, where transactions are exchanged only when both payment and asset delivery happen—mirroring safeguards long used in traditional markets,” a ClearToken spokesperson said. DvP is a cornerstone of traditional finance (used in stock and bond markets to eliminate settlement risk), and its crypto adoption addresses a major concern for institutional investors, who have hesitated to enter crypto due to counterparty and settlement risks.

CT Settle targets two key crypto trading issues: Herstatt risk and capital inefficiencies. Herstatt risk—named after the 1974 collapse of West Germany’s Herstatt Bank—is the danger of one party failing to deliver an asset after receiving payment. In crypto, this risk is worsened by 24/7 markets and lack of standardized settlement. Pre-funded crypto trading also ties up investors’ capital in exchange accounts (limiting other investments). ClearToken’s platform resolves both via simultaneous asset/payment transfer and a “horizontal” model that enables settlement across multiple venues and custodians (not tied to one exchange).

The FCA’s decision aligns with UK regulators’ push to make the country a global hub for regulated digital assets. Recently, the Bank of England launched a consultation on stablecoin payment rules (to be finalized by 2026), while HM Treasury refines regulations for digital asset custody and issuance—including proposals to expand crypto asset types allowed in UK-regulated funds. These efforts aim to balance innovation and investor protection, a challenge some other jurisdictions have struggled with.