Too many cooks: How regulatory infighting is choking the UK's crypto hub ambitions
TL;DR
The UK's goal to become a leading digital asset hub is hindered by political inertia and regulatory gridlock, according to industry experts. Concerns are rising that the country may lose its competitive edge in the crypto market to other regions.
Key points
- UK's ambitions to be a digital asset hub face regulatory gridlock
- Bureaucratic barriers delay unified crypto framework implementation
- Concerns grow over losing economic ground to Washington and Brussels
- Institutional divide hampers swift execution in the crypto sector
- Key players include HM Treasury, Bank of England, and FCA
Mentioned in this story
Financial Conduct AuthorityBank of EnglandHM TreasuryJonny Fry
The U.K.’s ambitions to become a dominant global digital asset hub is running into a wall of political inertia and regulatory gridlock, Jonny Fry, a blockchain and global banking researcher, founder of Digital Bites and CEO at TeamBlockchain Ltd., told CoinDesk.
Despite outward assurances of progress from the Financial Conduct Authority (FCA), industry insiders suggest that nagging bureaucratic barriers and legislative friction behind closed doors are severely delaying the implementation of a unified crypto framework. The slow progress is creating rising concern that Britain is conceding critical economic ground to regimes in Washington and Brussels.
Fry said the U.K. should worry over other more critical issues. “The real risk is not that firms physically leave Britain,” he said. “The risk is that the next generation of digital asset infrastructure is built somewhere else.”
The concern on the floor of the Digital Money Summit 2026 in London reflects a deep-seated institutional divide. While the private sector demands swift execution to unlock massive market efficiencies, a web of divided remits between HM Treasury, the Bank of England and the FCA has severely fractured the payment and investment perimeters.
"We have a situation at the moment whereby the Treasury is looking to set the law, and then we're having the FCA looking to have publicly-issued stablecoins and a Bank of England-issued digital pound," Fry noted.
He warned that this fragmented approach creates deep operational uncertainty, complicating how the jurisdiction handles the "singleness of money" across tokenized deposits and digital assets.
This administrative friction has pushed several high-profile digital asset firms to abandon the U.K. entirely, choosing to relocate to jurisdictions with immediate regulatory clarity. Fry cited the crypto derivatives exchange Deribit as a prime example.
"Had we had the regulatory clarity that staking your crypto was not a collective investment scheme, maybe Deribit would have relocated here in the U.K.," Fry said, estimating that the missed opportunity cost the U.K. government hundreds of millions in tax revenues following Coinbase’s acquisition of the platform.
Andrew MacKenzie, CEO of sterling stablecoin developer Agant, told CoinDesk in February he believed that regulations were moving in the right direction, but were moving too slowly to support its global digital asset hub ambitions.
The Bank of England’s cautious, slow approach to crypto is heavily frustrating the private sector, a Financial Times article stated last week, It added that while businesses are pushing for fast integration, the central bank’s tight restrictions on stablecoins have created a massive regulatory bottleneck.
Q&A
What is causing regulatory delays in the UK's crypto framework?
Regulatory delays in the UK's crypto framework are caused by bureaucratic barriers and legislative friction among various governmental bodies.
How might the UK's crypto ambitions impact its economy?
The UK's ambitions in the crypto sector could impact its economy by risking the development of digital asset infrastructure in other countries, potentially conceding economic ground.
Which organizations are involved in the UK's crypto regulatory framework?
The key organizations involved in the UK's crypto regulatory framework include HM Treasury, the Bank of England, and the Financial Conduct Authority (FCA).
What are industry insiders saying about the UK's crypto regulations?
Industry insiders express concern that despite assurances from the FCA, the slow progress in establishing a unified crypto framework is detrimental to the UK's competitiveness.
