With the Financial Conduct Authority (FCA) employing over 100 staff dedicated to crypto oversight and finalising comprehensive regulatory frameworks, institutional investors now have clearer pathways to integrate digital assets into traditional portfolios. A 2025 EY-Parthenon survey revealed that 94% of institutional investors believe in the long-term value of digital assets, with 67% already invested directly in digital assets or funds that hold digital assets in their portfolios.

Navigating this fast-changing environment requires clarity and infrastructure that bridge traditional finance and digital innovation. As stamp duty changes impact property investment yields and predictability, and economic uncertainty drives portfolio diversification, asset managers increasingly seek alternatives that combine growth potential with institutional-grade security.

The momentum behind institutional crypto adoption is set to accelerate further in 2026, with increased broader interest and stronger regulatory oversight. EY research shows that 42% of digital asset institutional investors plan to increase their digital asset investment allocation, while 68% express interest in registered cryptoasset funds. This shift reflects a growing recognition that professional crypto investment is moving from frontier interest to mainstream asset management strategy.

Traditional banks are responding decisively too. In July 2025, Standard Chartered launched deliverable spot trading in bitcoin and ether for institutional clients. Meanwhile, asset managers are increasingly exploring tokenisation, with research by EY showing that 40% of firms are interested in tokenising their own assets, “driven by instant settlement, liquidity, and the ability to offer fractional ownership.”

This institutional embrace extends beyond trading. The Digital Securities Sandbox, launched jointly by the Bank of England and the FCA in 2024, enables regulated experimentation with tokenisation. Similarly, Coinbase survey data indicates that 65% of institutional investors expect widespread crypto adoption within three to five years, with allocations averaging around 5% of assets under management. However, some say that it could be as high as 12%.

Professional infrastructure remains central to institutional adoption, particularly as regulatory requirements crystallise. In 2025, the FCA published Consultation Paper 25/14 on cryptoasset custody and CP25/15 on prudential requirements. These proposals introduce comprehensive rules on safeguarding client cryptoassets, segregation of funds, reconciliation standards, and minimum capital requirements of £150,000 for custodians and £350,000 for stablecoin issuers.

Custodians operating under the new framework will need daily reconciliation, transparent governance, and secure private key management under non-statutory trust structures. These requirements represent a fundamental shift from the current registration-based system to comprehensive authorisation under the Financial Services and Markets Act 2000.

For asset managers, this regulatory evolution creates opportunity but is not without new obligations too. While clearer frameworks enable confident participation, they also demand partners capable of meeting evolving compliance standards. Digital asset custody UK services must now deliver institutional-grade cold storage, multi-signature governance, daily reconciliation, and audit-ready reporting. These are all capabilities that distinguish professional institutional-focused platforms from their retail-focused counterparts.

The UK's approach to crypto regulation represents one of the world's most comprehensive frameworks. Draft legislation published in April 2025 expands the Financial Services and Markets Act 2000 to cover “qualifying cryptoassets”, requiring firms to secure FCA authorisation rather than relying solely on Anti-Money Laundering registration.

This regulatory commitment extends beyond legislation. In addition to the aforementioned FCA commitment to hire over 100 new employees for crypto oversight, the regulator’s consultation papers outline comprehensive frameworks for crypto custody, issuance, and prudential capital, signalling a clear commitment to a new global benchmark in professional and regulatory standards.

These developments create fertile ground for FCA-regulated crypto services, giving asset managers the clarity needed for institutional participation. However, regulatory compliance extends beyond authorisation to encompass transaction monitoring, AML processes, and governance structures aligned with evolving requirements. Asset managers require partners that meet current standards but also, crucially, anticipate future regulatory developments.

Beyond regulatory compliance, asset managers must assess custody security, operational resilience, governance capabilities, and integration potential. UK-based coinpass, part of OANDA Group, addresses these requirements through several key differentiators:

An FCA-registered institutional platform

coinpass operates under FCA registration in the UK, ensuring rigorous adherence with both current requirements and proposed CP25 frameworks. This regulatory foundation provides asset managers across the UK with confidence in their crypto investment and asset storage.

Institutional-grade custody

Multi-signature governance, geographically distributed cold storage, and daily reconciliation procedures address the security and adherence requirements outlined in FCA consultation papers. These capabilities enable asset managers to meet fiduciary standards while accessing digital asset markets.

Governance and audit capabilities

Purpose-built for institutional oversight, coinpass provides the governance frameworks and audit trails that asset managers require for trustee responsibility and regulatory reporting. This includes comprehensive transaction monitoring, reporting, and integration with existing operational systems.

Future-ready architecture

Built to align with CP25 proposals and the forthcoming comprehensive UK cryptoasset regime, coinpass ensures that asset managers can adapt to regulatory evolution without infrastructure replacement.

The case for digital asset allocation extends beyond regulatory clarity to fundamental portfolio considerations. With UK property now facing higher stamp duty costs – the buy-to-let surcharge increased from 3% to 5% in April 2025 – and a slowing housing market increasing investor uncertainty, asset managers increasingly seek alternatives that combine growth potential with strong liquidity.

Bitcoin's historical performance illustrates this potential. Between September 2020 and September 2025, Bitcoin's value increased from $10,000 to over $110,000.

This diversification potential becomes particularly relevant as institutional adoption accelerates. The London Stock Exchange's launch of Bitcoin and Ethereum exchange-traded notes in May 2024 demonstrates growing institutional access, while pension advisory firm Cartwright reported increasing institutional interest in cryptocurrency portfolio allocation following its advice to a UK pension scheme to invest in Bitcoin in late 2024.

As regulatory frameworks mature and institutional adoption accelerates, the opportunity for UK asset managers to integrate digital assets is growing increasingly compelling. Regulatory clarity, institutional infrastructure, and growing client demand create conditions for sustainable crypto adoption within professional investment frameworks.

The shift from speculative participation to institutional integration represents a fundamental market evolution. Asset managers that establish robust crypto capabilities now position themselves advantageously for client demands and competitive differentiation. However, this opportunity requires infrastructure partners capable of meeting both current requirements and future regulatory developments.

coinpass enables this positioning through comprehensive institutional capabilities that address current requirements while anticipating future developments. Offering FCA registration, institutional-grade custody, a dedicated account manager and technical support, and purpose-built asset manager integration, coinpass provides the foundation for confident digital asset participation.

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