ClearToken, a London-based digital financial market infrastructure firm, announced a landmark achievement: it has received authorization from the UK Financial Conduct Authority (FCA) to launch its Delivery versus Payment (DvP) Net Settlement system for digital assets. The system, known as CT Settle, represents the crucial first phase in the firm’s roadmap to build a neutral, horizontal market infrastructure for global digital assets clearing and settlement.
This approval signals a determined push by the UK to modernize its financial infrastructure, addressing past criticisms regarding the slow pace of digital asset integration. The CT Settle platform is designed to allow institutional clients to settle trades in crypto, stablecoins, and fiat currencies simultaneously using the DvP model, similar in concept to the CLS system in traditional foreign exchange markets.
Key Institutional Benefits:
Elimination of Settlement Risk: By ensuring the delivery of assets and the payment occur concurrently, the system eliminates Herstatt risk, a major concern in traditional settlements.
Capital Efficiency: The platform is designed to remove costly pre-funding requirements prevalent in traditional digital trading environments, thus freeing up vital institutional liquidity.
Benjamin Santos-Stephens, CEO of ClearToken, stated that the launch of the regulated DvP service directly addresses the credit risks and capital inefficiencies that have long constrained the growth of institutional digital markets. Niki Beattie, Chair of ClearToken, added that this authorization is the "catalyst that will allow digital assets to be adopted at scale."
The FCA authorization grants ClearToken the status of an Authorised Payment Institution and a registered cryptoasset firm. This forms the foundation for its Phase 2 objective: seeking Bank of England approval to establish the ClearToken Central Counterparty (CCP) and operate as a Recognized Clearing House (RCH) to expand into cross-product margining and clearing services. This move positions the UK to deliver a secure, trusted financial infrastructure for digital assets globally.