U.K. Falling Behind in Crypto Innovation—Former Finance Chief George Osborne Sounds Alarm

The U.K. risks becoming a blockchain backwater as global rivals sprint ahead in crypto adoption—and George Osborne isn’t mincing words.

Regulatory Gridlock Stifles Growth

While Singapore and Dubai roll out red carpets for digital asset firms, Britain’s cautious approach has left startups eyeing friendlier jurisdictions. The ex-Chancellor’s warning comes as Treasury mandarins still treat crypto like a tax loophole waiting to happen.

Missed Opportunities Mount

From institutional DeFi platforms to CBDC pilots, competitors are eating London’s lunch. Banking giants now execute billion-dollar tokenized trades elsewhere—because why navigate Britain’s ‘wait-and-see’ purgatory?

Osborne’s critique lands as the FSA drags its feet on clear frameworks, proving once again that financial innovation moves faster than bureaucrats’ risk assessments. Maybe they’re too busy calculating their gold-plated pensions.

Call for Clear Rules

Osborne stated that Reeves should follow the U.S. Congress and create proper laws for stablecoins. He claimed that blaming regulators for delays is just an excuse. The U.S. has recently passed a law called the Genius Act supporting the use of stablecoins, while the EU has also introduced its own rules.

The UK government has said that it is working on crypto regulation and plans to create clear, strong rules to protect investors and support innovation. It also pointed out that the UK is still Europe’s top fintech hub and cooperating with the U.S. on tech-related policies.

Bank of England Still Cautious

In 2023, the Bank had said any stablecoin used widely in the UK should be 100% backed by central bank deposits that earn no interest, a MOVE that made UK-based stablecoins less appealing.

But now, the Bank of England is rethinking that approach. It may allow these stablecoins to earn some return, and a public consultation is expected later this year.

Andrew Bailey, the Bank of England governor, is more careful. He recently said stablecoins need to be SAFE and reliable. If they’re not, they could disrupt the UK’s financial system. He doesn’t support allowing regular banks to issue stablecoins but prefers something called “tokenized deposits,” a safer digital version of money already held in banks.

U.K. Lags Behind Others

Despite early proposals from the UK’s Treasury and Financial Conduct Authority, the country still doesn’t have a full legal framework for stablecoins. Meanwhile, U.S. dollar-based stablecoins dominate 99% of the global $250 billion market.

While Osborne pushes for action, Reeves’ team insists there is no conflict with the Bank of England and that efforts are ongoing.

Also Read: Coinbase UK Ad Ban Sparks Crypto Debate, Says CEO Brian Armstrong