In a significant move poised to reshape the global digital asset landscape, the United Kingdom and the United States have launched a joint task force aimed at harmonizing crypto market standards and fostering unprecedented cross-border liquidity within the next six months. This collaborative effort, spearheaded by finance ministries and regulators from both nations, is designed to dismantle existing frictions in digital asset capital markets, promising a more integrated and efficient environment for crypto investments.
Streamlining Cross-Border Listings and Capital Raising
The core of this initiative involves creating a unified framework for crypto product listings. Leveraging the new U.S. exchange framework, which allows generic listing of spot commodity and crypto exchange-traded products (ETPs), the task force seeks to establish a "fast-path" for UK secondary listings. This means London can potentially recognize U.S. diligence and market surveillance agreements, dramatically reducing the time-to-list for UK-based products to around 75 days, mirroring the U.S. standard. Complementing this, UK capital-raising reforms, including streamlined prospectuses and a new public offers platform, will further reduce documentation periods and allow crypto infrastructure and fintech issuers to run parallel fundraising efforts across both markets, drawing on precedents like the North American multijurisdictional disclosure system.
Enhancing Custody and Market Efficiency
A crucial component of market integration is the standardization of crypto custody practices. With the U.S. Office of the Comptroller of the Currency (OCC) having affirmed national banks' ability to offer crypto asset custody, and the UK actively consulting on its own custody and sterling stablecoin regimes, the goal is a joint FAQ. This document will clarify sub-custody and segregation standards, enabling bank-affiliated providers to facilitate triparty settlement and attestation cycles within the ETP workflow. Such clarity is expected to reduce operational drag, lower concentration risks, and ultimately lead to tighter trading spreads and reduced custody fees, drawing on the depth and market maker competition observed in the U.S. spot Bitcoin ETF market.
A Practical Roadmap for Market Transformation
Rather than wholesale statutory changes, the initiative will primarily rely on "soft law" tools, including recognition notes connecting U.S. listing criteria to UK requirements, a custody sub-delegation FAQ, and a model disclosure annex for various corporate actions and staking treatments. These practical outputs aim to quickly deliver a workable playbook for firms. The anticipated outcomes include a significant increase in London Stock Exchange (LSE) crypto ETN daily volumes, a compression of quoted spreads by 20–50%, and an expansion of product lines, benefiting ETP issuers, market makers, and exchanges. The focus remains on immediate, actionable steps to unlock greater market depth, liquidity, and cross-border arbitrage opportunities for digital assets.
