The UK will struggle to become a global hub for digital assets unless regulators balance consumer protection and competitiveness, industry leaders have warned.
Speaking at the Innovate Finance Global Summit, executives from Agant, Ripple, XDC, Coinbase and Fireblocks cited stablecoins and tokenisation as key growth opportunities – but said regulatory uncertainty in the UK is already pushing activity overseas.
Tom Rhodes, chief legal officer at GDP stablecoin issuer Agant, said stablecoins are becoming essential to on-chain finance. He added that “anybody who’s looking at doing basically anything on chain probably needs a stablecoin”, with applications now spanning payments, tokenised funds and cross-border transactions.
However, lengthy, often duplicative approval processes are deterring participation, with FCA registration sometimes taking up to a year. Nigel Khakoo, senior vice president at Ripple, reiterated these concerns, pointing out that firms can choose to grow their businesses elsewhere.
This is despite the “enormous amount of financial talent in the UK”, which has traditionally been a “place of trust in the financial markets, with the rule of law, a deep talent pool and historically progressive regulation.”
“We need to exercise that again,” he added.
Varun Paul, senior director, financial markets at Fireblocks, added that the UK is at a “critical moment” in shaping its regulatory framework, with an opportunity to act as a fast follower to the EU and US – but noted ongoing industry concerns around the complexity of some proposals.
Stablecoins have the potential to significantly improve capital efficiency and settlement speed in markets that still rely on outdated infrastructure. Tokenisation, meanwhile, is expected to reshape capital markets, with blockchain increasingly used to modernise traditional financial products.
Ken Chapman, head of UK markets at XDC Network, added that traditional financial institutions risk falling behind if they fail to engage with digital assets, particularly as new models around liquidity, lending and programmable finance emerge.
Keith Grose, UK CEO at Coinbase, also highlighted potential restrictions on stablecoin holdings and decentralised finance as areas that could limit growth if implemented. He said there is a “real opportunity” for the UK but added that the rules must enable businesses to grow and expand.
Speakers stressed that time is of the essence. Unless clearer, more flexible regulation is introduced, the next wave of digital asset innovation – and capital investment – may leave the UK behind.
