Monk fruit extract (Siraitia grosvenorii, MFE) is a natural, non-caloric sweetener known for its intense sweetness, antioxidant properties, and potential metabolic health benefits. While certain aqueous monk fruit decoctions are recognised as non-novel foods in the UK and Ireland due to significant pre-1997 consumption, the European Union (EU) has adopted a more cautious approach under the Novel Food Regulation (EU) 2015/2283. As of October 2024, only one specific aqueous extract of monk fruit has been authorised in the EU under Regulation (EU) 2024/2345, permitting its use in several food categories. However, highly purified mogrosides and non-aqueous extracts remain unapproved due to gaps in toxicological data and the absence of industry-led applications. This review systematically analyses the EU’s regulatory barriers, comparing MFE’s legal status with other approved non-caloric sweeteners such as steviol glycosides and erythritol, and examining regulatory frameworks in the EU, United States, United Kingdom, and China. Findings indicate that although 18 non-caloric sweeteners are currently authorised in the EU, regulatory constraints continue to hinder the broader approval of MFE, limiting innovation and the availability of natural sweeteners for consumers. Harmonising regulations, leveraging international safety assessments, and promoting industry engagement are recommended to advance MFE’s authorisation and support sustainable food innovation in the EU. Addressing these challenges is crucial to ensure that European consumers and industry can benefit from safe, innovative, and health-promoting alternatives to sugar, aligning food policy with broader public health goals and sustainability commitments.