Digital financial market infrastructure firm ClearToken has secured authorisation from the UK’s Financial Conduct Authority (FCA) to launch its Delivery versus Payment (DvP) net settlement system, a landmark move aimed at building a regulated, institutional-grade backbone for the digital asset market.
The new service, named CT Settle, is designed to eliminate the costly pre-funding requirements and settlement risks that have long been significant barriers to entry for traditional financial institutions. By introducing a centralised, post-trade settlement model for cryptoassets, stablecoins, and fiat currencies, ClearToken aims to bring the operational standards of traditional finance to the 24/7 digital asset world, mirroring the role of established infrastructures like CLS in the foreign exchange market.The FCA approval grants ClearToken status as an Authorised Payment Institution and a registered cryptoasset firm. This provides the regulated foundation necessary to tackle the market’s deep-seated capital inefficiencies and counterparty risks, paving the way for wider institutional adoption.
“This is a significant step, not just for us, but for the whole institutional digital asset space,” says ClearToken CEO Benjamin Santos-Stephens, in conversation with TradingTech Insight. “This approval provides a clear, realistic path forward for growing the digital asset economy. We’re directly tackling the big problems – the credit risks and locked-up capital – that have been holding back institutional growth. It’s about building that solid, trusted, regulated foundation the market needs to finally deliver on the promise of tokenisation and bring the TradFi and DeFi worlds together.”
ClearToken’s ‘horizontal’ model is a key aspect of its design, remaining agnostic to trading venues and custodians. This allows firms to separate their execution and custody choices, a standard practice in traditional markets that has been largely absent in the vertically integrated crypto space. This structure is intended to reduce operational drag and centralise instruction management, easing the burden on operations and treasury teams.
The platform is set to benefit a wide range of market participants who have been constrained by the need to pre-fund accounts across multiple venues, a practice that fragments liquidity and consumes vast amounts of working capital.
Santos-Stephens explains who stands to gain the most from this new infrastructure. “The real beneficiaries are anyone who needs independent custody. This could be for OTC trades with a dealer, or for venues that don’t have their own custodian, for example. Also buy-side institutions, especially those with several custody relationships who need to allocate post-trade. Of course, it’s also a big help for brokers and prime brokers who are juggling multiple relationships and just need to get things settled efficiently.”
The FCA authorisation represents the successful completion of the first phase of ClearToken’s strategic roadmap. The firm is already progressing with Phase 2: establishing a Central Counterparty (CCP) and becoming a Recognised Clearing House, which will be subject to approval from the Bank of England. The long-term vision (Phase 3) is to extend these services to all asset classes, including tokenised securities, for which ClearToken is already participating in the Bank of England’s Digital Securities Sandbox.
With the regulatory green light now secured for its initial service, the firm is moving swiftly towards launch.
“We’re now just weeks away from going live, and we’ll be going live with our investors first,” Santos-Stephens confirms. “Because we’re majority market-owned, it makes sense for them to be the first beneficiaries. From there, we’ll roll this out more widely across the market.”
Niki Beattie, chair of ClearToken, commented: “This is the catalyst that will allow digital assets to be adopted at scale. The introduction of governance, credibility, and operational resilience that comes with being a fully regulated UK institution means that serious institutional capital can now move with greater confidence into these markets. This FCA authorisation is an important step in the UK’s growth and competitiveness objectives as it moves the UK towards delivering trusted, secure financial infrastructure for digital assets globally. We wish to recognise and thank the teams at the FCA for working through this innovative model with us in the lead-up to authorisation.”
Subscribe to our newsletter
