Digital assets in the UK are at an inflexion point. The Chancellor Rachel Reeves stated her ambition for the UK to be a world leader in digital assets in April. Since then we have seen HM Treasury publishing draft legislation to set up the new regulatory framework for crypto assets, and a series of consultations from the FCA covering cryptoasset activities, stablecoin issuance and custody, and prudential treatment of crypto firms. We have also seen new participants announced for the Digital Securities Sandbox run by the FCA and Bank of England, and the announcement of a pilot to issue a digital UK government bond (known as DIGIT).
The opportunity for the UK is huge. If the regulatory framework is designed correctly, it can facilitate innovation, enhance financial inclusion and solidify the UK’s position as a competitive global financial centre. This directly aligns with the government’s number one mission of boosting economic growth. The government can unlock this growth by supporting the development of the UK as a global hub for digital assets, but to do so successfully it needs to create a regulatory framework that empowers financial institutions to incorporate and invest in digital assets and blockchain technology with confidence.
Ripple convened a London Policy Summit, in partnership with the UK Centre for Blockchain Technology and Innovate Finance, to explore how UK regulators can make the most of this opportunity. The Summit gathered a range of experts from academia and industry to discuss the potential for the UK’s new regulatory framework for crypto-assets.
The summit focused on several key areas:
What the UK can learn from regulatory practices from other jurisdictions;
The role of stablecoins as a new form of money; and
How to position the UK as a leader in tokenisation.
Our new whitepaper outlining key crypto-asset policy recommendations from the summit, in collaboration with our event partners and contributors, highlights key takeaways from the event which are summarised below.
Regulatory Frameworks for Digital Assets are Critical for Success
As digital assets represent one of the most promising avenues for unlocking economic growth, participants recognised that the legal and regulatory framework is a crucial success factor - particularly for institutional adoption. The defining takeaway of the day was a clear sense of urgency for the UK to act swiftly and seize these opportunities.
Recommendation 1: Driving Digital Asset Investment and Growth at Pace
The Government and regulators must act at pace to develop a crypto-asset regulatory framework that drives investment and growth. This is crucial for the UK to seize the opportunities offered to early movers and advocates of digital assets.
Recommendation 2: An Open and International Approach
The UK must seek to improve on other jurisdictions’ regulatory approaches in order to meet its ambition of becoming a global leader in digital assets. The strategy should also consider interoperability with global regulatory frameworks, so firms do not face conflicting requirements and unnecessary burdens.
Recommendation 3: Stablecoin Circulation is Key
The UK should move faster on stablecoin regulation. Stablecoins will be critical to the digital economy; we support the UK’s proposed approach to allow overseas issued stablecoins to circulate without local issuance requirements to solidify its role as an international financial centre.
Recommendation 4: Tokenisation Could Be the Tipping Point
The UK Government and regulators have made a promising start in promoting tokenisation, which is set to transform the financial markets of the future. However, a bold and ambitious approach is essential to tackle the legal, regulatory and tax barriers faced by industry and ensure the UK’s positioning as a global leader on tokenisation.
Blockchain Technology is Powering Financial Innovation in the UK
Blockchain technology enables direct transactions between parties, making cross-border payments cheaper and faster by reducing transaction fees and processing times. Blockchain also democratises access to financial services by providing secure platforms for lending, borrowing, and investing, and its decentralised and immutable ledger system reduces the need for manual record-keeping and reconciliation. This leads to increased transparency and minimises errors and fraud.
The substantial industry appetite to experiment with this crypto-asset and blockchain technology is evident. In 2024 over 90% of major finance firms surveyed in the US, Asia, Europe (including the UK) and the Middle East were already handling cryptocurrency in some shape or form, including as part of ‘testingʼ the digital asset sector. By adopting blockchain technology, the UK can position itself as a leader in financial innovation. This would attract investment and foster a thriving fintech ecosystem, ultimately creating high-skilled jobs. Improved access to finance supports entrepreneurship and economic participation, while enhancing operational efficiency leads to cost savings.
With more stablecoin use cases being proven, and tokenised financial assets gaining traction in traditional finance, the UK’s regulatory landscape must evolve now to capitalise on this opportunity and seize the moment to further cement itself as a leader in global finance.
Read more about how the UK can maintain its international competitiveness in digital assets.
