FCA invites wholesale banks to apply for crypto permissions by February 28
TL;DR: The Financial Conduct Authority reminded wholesale banks that they can apply to extend permissions into regulated cryptoasset activities under the UK’s new framework. Applications submitted by February 28, 2027 may qualify for continuity while decisions are pending. The broader regime is expected to begin on October 25, 2027.
The FCA signaled that wholesale banks can begin seeking permissions for crypto activities ahead of the regime’s start date. This shifts the focus from crypto-native firms to established institutions that already serve financial markets.
In its November 2 wholesale-banks supervisory update, the FCA stated banks can submit a variation of permission for activities being brought inside the regime: custody, operating trading platforms, dealing, arranging transactions, stablecoin issuance and staking.
An application window, not automatic approval
Application window: opened September 30, 2026. The FCA is encouraging wholesale banks to apply by February 28, 2027. Planned regime start: October 25, 2027.
Purpose of the early deadline: applications lodged by February 28 should receive a decision before the regime begins or allow firms to continue relevant crypto activities while decisions are pending. Applications after February 28 but before October 25 may face different transitional arrangements.
Scope of approval: a variation of permission depends on the proposed activity, legal requirements and FCA assessment. It is not blanket approval for all crypto services. Safeguards remain mandatory: custody design, operational controls, protections for clients, sanctions screening and governance must align with the proposed activity. A banking licence does not relax these expectations.
Potential market impact of bank entry
Banks bring customer relationships, compliance infrastructure, payments systems and balance-sheet capabilities. Regulated bank participation could enable businesses to access digital-asset services through familiar institutional channels.
Selectivity likely increases: banks may limit assets, counterparties and custody forms. Support for tokenized instruments or settlement rails does not imply endorsement of all exchange-listed tokens.
This policy aligns with broader moves to connect financial assets to blockchain infrastructure. Plans for tokenized securities infrastructure illustrate the operational systems institutions evaluate before moving transactions onchain.
FCA expectations for credible applications
Banks must define: responsibility allocation, supported assets, client asset safeguarding, failure and disorderly-market procedures. The February 28 date functions as an operational checkpoint to test firms’ readiness and supervisors’ processing capacity.
Key variables to watch: volume and quality of applications, FCA decisions and further guidance. Wholesale-bank participation could become a material component of the UK crypto market. The current development: a formal route to apply is open, not a wave of new bank crypto products.
This article was written by the News Desk and edited by Samuel Rae.
Featured image: Canary Wharf financial district in London. Photo: mattbuck via Wikimedia Commons, licensed under CC BY-SA 3.0.
Authors credited by the source: NewsBTC Editorial Team
Published by Holder based on an external source.
