In this article, a signal processing framework for hardware‐in‐the‐loop (HIL) validation of the cloud‐radio access network (C‐RAN) control unit (CU) with a crosshaul intra‐PHY architecture split is evaluated. The framework is based on the assumption that data exchanged over the crosshaul interface between the lower and higher parts of the physical layer have the form of frequency‐domain orthogonal frequency division multiplexing (OFDM) subcarriers. Therefore, it is proposed to simulate the effects of a wireless fading channel directly in the frequency domain, instead of the conventionally selected time domain. This approach leads to complexity reduction of the channel simulation model by minimizing the number of required FFT/IFFT operations, at the cost of simulation accuracy in high‐mobility and high‐delay spread scenarios. Analysis of bit error ratio (BER) and block error ratio (BLER) metrics obtained using both time‐ and frequency‐domain channel models is presented in order to validate the proposal and evaluate the accuracy loss caused by the usage of nonideal frequency‐domain models. The frequency‐domain methods are compared against the conventional wide sense stationary uncorrelated scattering (WSSUS) model implementation based on the tapped delay line (TDL). It is shown that the utilization of improved frequency‐domain models instead of the block‐fading model substantially decreases the BER/BLER prediction error in specific scenarios.