London’s Fintech legacy at risk
I looked at the numbers recently, and they tell a pretty clear story. UK tech funding is down 35% to £16.2bn this year, which is pretty significant when you think about it. The London Stock Exchange recorded 88 delistings last year, compared to just 18 new listings. This ratio seems wrong to me. And then there is Revolut – one of London’s success stories – which announces plans to move its key operations to Paris. These are not isolated incidents; they are part of a pattern that suggests London could lose its advantage as a European center of financial innovation.
But here’s what caught my attention: the digital assets sector is no longer limited to speculative trading. Global stock market capitalization surpassed $4 trillion last September, and some projections suggest it could reach more than $20 trillion by 2030. That’s no small feat. Institutions like BlackRock and JP Morgan are starting to treat digital assets as a legitimate asset class rather than just a curiosity.
The Stablecoin Opportunity
Stablecoins are of particular interest to me because they seem to bridge traditional finance and crypto in a practical way. The global market capitalization of stablecoins now exceeds $300 billion, and Citigroup projects growth of $4 trillion by 2030. What is often overlooked is that stablecoin issuers generate substantial demand for government bonds and treasuries – they already hold significant amounts of U.S. government debt.
Yet the UK appears hesitant. The only major political party with clear policy positions on digital assets appears to be Reform UK, while the current government is aiming for full implementation of the framework by the first quarter of 2026. This seems a long time to wait as other regions move more quickly.
Banking challenges and regulatory gaps
There’s this banking issue that keeps coming up in surveys: 50% of UK crypto and fintech companies reported having had bank accounts refused or closed. Even more striking, 98% of crypto hedge funds faced unexplained bank declines in 2024. This systematic “unbanking” stands in stark contrast to the policies that helped companies like Monzo and Revolut get off the ground.
Meanwhile, the United States passed the GENIUS Act for stablecoin frameworks earlier this year, and the European MiCA regulation could potentially bring €1.8 trillion to European markets. Hong Kong’s licensing regime has resulted in 85% market growth in their region. The UK’s recent announcement of a UK-US transatlantic working group is a step forward, but it positions the UK as following US standards rather than setting its own.
Central bank confusion
To be honest, recent statements from the Bank of England have been quite confusing. In July, Governor Andrew Bailey warned that stablecoins could threaten the traditional banking sector by reducing the reliance on deposit-based lending. He even suggested capping stablecoin holdings. But this week, he completely reversed course, saying it would be “wrong to be against stablecoins on principle” and acknowledging that they could spur payments innovation.
This change in mentality is welcome, but it comes without real political decisions and years after other regions adopted similar frameworks. Meanwhile, the UK has lost momentum and market share.
Reasons to hope
Despite these challenges, I think there are reasons to be optimistic. Gemini’s 2025 report shows that UK cryptocurrency ownership has jumped to 24%, faster growth than the US. This popular adoption creates organic demand for better regulation. Post-Brexit, Britain has flexibility that the EU lacks – implementing MiCA has proven difficult with forecasts of a 75% drop in the number of licensed businesses due to compliance barriers.
The UK’s regulatory heritage could actually be an advantage. Rather than creating entirely new frameworks, the UK can adapt existing financial services regulations to encompass digital assets. This principles-based approach may adapt better to rapid technological change than prescriptive rulemaking.
But the window closes. Each month of delay means competitors are capturing more institutional investment, attracting top talent and building the infrastructure of tomorrow’s financial system. Revolut’s move to Paris could be just the start of a larger trend unless the policy changes quickly.
Britain has built its financial reputation on innovation – from the world’s first ATM to pioneering fintech regulation. This tradition does not necessarily have to end with the analog economy. By taking decisive action, the UK could further position itself as a bridge between traditional finance and the digital future.
