The UK is at a crypto crossroads
With both the US and EU poised to introduce regulatory regimes for crypto, the UK must urgently establish itself as a hub for innovation, says John Glen
During my years in the Treasury, I saw firsthand the transformative power of technology in shaping our economy, and I also witnessed the state building barriers to emerging innovations. As we progress through 2025, the UK faces a pivotal moment in deciding whether it will lead or lag in the burgeoning field of cryptocurrencies and blockchain technology.
With Donald Trump’s return to the White House, the United States is poised to implement a pro-crypto regulatory regime, catalysing innovation and investment. Similarly, the European Union’s Markets in Crypto-Assets Regulation (MiCA) offers a harmonised framework, albeit with its challenges, for crypto firms across the 27 member states. These developments underscore the urgency for the UK to establish itself as a hub for crypto innovation. Unfortunately, current trends suggest we are falling behind.
Crypto leaders broadly feel that the Financial Conduct Authority (FCA) has adopted an excessively cautious stance toward the industry, even creating a combative environment. For instance, Copper, a leading crypto custody firm, recently withdrew its application for UK registration, citing the burdensome regulatory environment. The FCA went six months last year without registering a single crypto firm; only four companies were registered during the entirety of 2024 – a stark contrast to the dynamic approaches being pursued in other major economies.
If the UK continues this path, it risks forfeiting its leadership in financial innovation and losing a vital opportunity to harness crypto’s transformative economic and societal benefits.
Blockchain technology and its applications represent a paradigm shift in financial services. By enabling decentralised, transparent, and efficient financial systems, crypto can democratise access to services, streamline transactions, and unlock new avenues for economic growth.
For example, stablecoins offer the potential for faster, more reliable cross-border payments, while decentralised finance (DeFi) platforms are already challenging traditional banking models. The underlying blockchain technology can also enhance supply chain transparency, secure digital identities, and foster innovation across a range of industries. Of course, none of this is new – crypto has become a force in the global economy and survived its naysayers.
The UK’s fintech sector, a global leader in its own right, stands to benefit immensely from integrating crypto technologies into its ecosystem. With nearly half of Europe’s fintech unicorns based in the UK, the foundations for success are already in place. However, a supportive regulatory environment is essential to maintain and build upon this competitive advantage.
In the United States, President Trump’s incoming administration is expected to streamline compliance requirements for crypto businesses, encourage the adoption of blockchain technology across industries, and invest in a strategic bitcoin reserve. This approach will unquestionably attract significant investment and talent to the US.
Meanwhile, though stringent in some areas, the European Union’s MiCA framework provides much-needed clarity for crypto firms operating across its member states. The consistency it offers starkly contrasts with the fragmented and currently opaque regulatory environment in the UK.
Without decisive action, the UK risks becoming a regulatory outlier where innovation is stifled, and entrepreneurs look elsewhere to build their businesses. In 2025, I believe there needs to be a new political and regulatory consensus to embrace crypto and educate the public. We should look to the US and the EU and adopt a regulatory approach that is both rigorous and flexible – balancing the need for consumer protection with the imperative to foster growth and innovation.
The FCA must change tack
The FCA must recalibrate its stance toward crypto firms. While I fully understand the regulator’s desire to safeguard against financial crime and consumer harm, that doesn’t need to be at the expense of stifling legitimate businesses. Crypto has proven itself resilient and there needs to be a recognition that it is an increasingly established part of financial services.
The UK government must take a proactive role in shaping the legal and tax frameworks for crypto assets. By clarifying the treatment of DeFi loans, staking, and other emerging practices, we can eliminate uncertainty and encourage investment. Initiatives like the Financial Market Infrastructure Sandbox, which allows firms to experiment with blockchain technologies, should be prioritised and expanded.
The choice before us is clear: we can either embrace crypto with boldness and vision, or we can allow caution and inertia to consign us to the sidelines
And we must signal to the world that the UK is open for crypto business. This requires not only regulatory reforms but also strategic investments in education, research, and infrastructure. Collaborations between the public and private sectors can accelerate the development of a thriving crypto ecosystem.
The choice before us is clear: we can either embrace crypto with boldness and vision, or we can allow caution and inertia to consign us to the sidelines. This is true of crypto as it is of many areas of the economy. Trump’s re-election has changed the game, it’s an economic shift we can’t ignore. Failing to act will have serious consequences. Businesses will migrate to more supportive jurisdictions, and the UK will miss out on the growth it so desperately needs.
John Glen is former city minister and MP for Salisbury