UK officially approves institutional cryptoasset trading… ClearToken settlement platform 'CT Settle' authorized

The UK's financial regulator has officially approved cryptoasset (cryptocurrency) trading for institutional investors. Financial market infrastructure firm ClearToken has been granted permission to operate the settlement system 'CT Settle' for stablecoin and cryptoasset trading, marking a new stage in the integration of digital assets into the UK financial market.

On the 12th (local time), the UK Financial Conduct Authority (FCA) announced that it had approved ClearToken's operating plan for the cryptoasset settlement platform CT Settle. This makes ClearToken the 57th company to receive official authorization since the UK's 'Cryptoasset Register' came into effect on 10 January 2020.

In a statement, ClearToken said, "The biggest reasons institutional investors hesitate to adopt cryptoassets are counterparty risk, market efficiency, and liquidity concerns," adding, "CT Settle is designed to remove these barriers so that financial institutions can safely settle stablecoins and cryptocurrencies while meeting regulatory requirements."

The platform adopts the DvP (Delivery versus Payment, simultaneous delivery of assets and payment) structure used in physical asset transactions to minimize settlement default risk among trading participants. With FCA approval, financial institutions will be able to conduct digital asset trading with a level of stability and regulatory compliance similar to existing payment systems.

Niki Beattie, Chair of ClearToken, said, "This approval will be a turning point for digital assets to become part of the financial market structure," adding, "From my experience of more than 30 years dealing with market structure, this decision will encourage institutional investor participation and increase credibility."

The UK government has recently been actively revising related systems to strengthen digital financial infrastructure. The Bank of England (BOE) discussed a draft of stablecoin regulations earlier this week and is conducting a consultation process aiming for implementation next year. Andrew Bailey, Governor of the Bank of England, recently emphasized a pragmatic approach, saying, "There is no need to be excessively worried about the risks stablecoins may pose to financial stability."

Alongside this, HM Treasury published a draft of cryptoasset regulations in April this year that proposes segmenting key activities such as issuance, custody, and trading and bringing them within a regulatory supervisory framework.

The UK government is also strengthening efforts to integrate cryptoassets into the existing financial system by allowing retail investors access to cryptocurrency exchange-traded notes (ETNs). The FCA's approval decision is seen as part of this national move.