‘Policy Procrastination’ Hurting UK’s Digital Asset Ambitions
The UK is rapidly losing its early advantage in digital finance, according to a critical analysis from the Official Monetary and Financial Institutions Forum (OMFIF). In a recent blog post, John Orchard and Lewis McLellan argue that the UK’s vague and delayed approach to crypto regulation is causing the nation to fall behind both the EU and the US.
“The UK keeps missing the boat on DLT finance,” the report said, warning that continued delays in regulatory clarity are undermining innovation.
While the UK had once aimed to become a post-Brexit leader in digital finance, experts now say that “policy procrastination” is preventing it from competing with more proactive jurisdictions.
FCA’s Crypto Roadmap Lacks Clarity
A key concern lies in the UK Financial Conduct Authority’s (FCA) crypto roadmap, which does not include a concrete launch date for its regulatory regime.
The timeline remains vague, with “regime go-live” expected sometime after 2026, leaving market participants uncertain and global firms hesitant to commit resources to the UK market.
This lack of specificity is seen as a major barrier to adoption and investment.
Meanwhile, EU and US Take Bold Action
The European Union’s MiCA (Markets in Crypto-Assets) framework has already come into force, providing legal certainty for digital asset firms across member states. In the US, the recent passage of the GENIUS Act introduces federal oversight for stablecoins, marking a major step toward comprehensive crypto regulation.
By contrast, UK regulators continue to lump stablecoins with crypto investment assets, a move that has confused the market and contrasts with international standards that treat stablecoins as payment instruments.
Bank of England Adds to Uncertainty
The Bank of England’s original proposal — requiring systemic stablecoins to be fully backed by central bank reserves — was met with strong industry resistance. Though the Bank has since signaled a more flexible stance, a workable model has yet to emerge.
Without clear guidance, the UK risks making stablecoin issuance commercially unfeasible, further weakening its fintech leadership.
Other Jurisdictions Surging Ahead
While the UK delays:
- Hong Kong passed a stablecoin bill in May and is actively building a tokenized finance ecosystem
- UAE’s VARA provides a dedicated digital asset regulatory body, avoiding the pitfalls of retrofitting legacy institutions
These moves highlight the growing divide between fast-moving crypto hubs and the UK’s slow regulatory response.
Conclusion
The UK’s reluctance to define clear digital asset policies is threatening its position in the global crypto economy. With major economies already implementing comprehensive frameworks, the pressure is mounting for UK regulators to deliver actionable, forward-looking rules.
Without swift reforms, the UK may lose its relevance in the next era of finance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.