“The current AML registration process with the FCA, which is very narrow, is already incredibly demanding, forcing the FCA to reject or withdraw more than 85 percent of applications,” he said in an emailed comment. The new framework introduces much broader requirements covering consumer duties, prudential standards, operational flexibility and higher management accountability.

Catty warned firms of delays in applications, pointing to the rollout of MICA in Europe, where many firms waited until the deadline approached, creating licensing bottlenecks that left some businesses without timely authorization.

For institutional investors, however, the new framework is more important than just another crypto rulebook.

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

“The underlying technology is powerful, but it doesn’t make a direct path into mainstream financial markets by itself,” Jones said. “You need legal clarity, operational flexibility, proper governance and rules that investors and institutions can recognize.”

Jones also welcomed the FCA’s recent reforms to its stablecoin regime, arguing that they create a stronger settlement structure without imposing unnecessary operational friction.

Industry responses suggest that the FCA has deliberately positioned the UK as a commercially viable alternative to Europe’s MICA regime. But whether this translates into firms choosing the UK over other jurisdictions will depend less on the ambitions of the framework than on how it is predicted to change in the coming months.