Will the UK Take Action on Crypto?

As the European Union rolls out its MiCA regulations and the United States makes strides with the GENIUS Act in the stablecoin space, the UK’s vague and slow-moving approach has sparked criticism.

In a blog post published on Friday, Lewis McLellan, editor at OMFIF’s Digital Monetary Institute, and John Orchard, the organization’s chairman, argue that the UK has “squandered” its early leadership in distributed ledger technology (DLT). The post, pointedly titled “The UK keeps missing the boat on DLT finance,” calls out the country’s inability to offer clear and timely regulation.

Following Brexit, there were high expectations that the UK would set the “gold standard” for crypto regulation. Instead, the UK continues to speak vaguely about future regulations without providing a clear timeline. This regulatory ambiguity is emphasized in the FCA’s Crypto Roadmap, where no firm date is provided for when its regime will “go live.” At best, the guidance hints at some time after 2026.

EU and US Make Clear Progress on Crypto

The Markets in Crypto-Assets (MiCA) framework is now active across the EU. Meanwhile, the US Senate recently passed the GENIUS Act, a federal law that clearly defines stablecoins as legitimate payment tools.

The UK, however, still categorizes stablecoins as investment assets—a stance that OMFIF analysts say has caused significant market confusion. The Bank of England’s early proposal, which required systemic stablecoins to be backed entirely by central bank reserves, was widely criticized as commercially unworkable. Though this position has since softened, the UK has yet to present a viable regulatory model.

Other Regions Are Moving Ahead

While the UK lags, others are pushing forward. In May, Hong Kong passed its own stablecoin bill and is rapidly building a tokenization infrastructure through its Project Ensemble initiative.

The United Arab Emirates has also been praised for establishing VARA (Virtual Assets Regulatory Authority), a specialized body overseeing digital assets. The UK, by contrast, is still trying to retrofit traditional institutions to manage Web3 and blockchain innovations—an approach that the report sees as insufficient.

The UK’s Early Advantage Is Eroding

OMFIF concludes the piece by noting that although the UK led the way in fintech innovation during the 2010s, and still benefits from its favorable time zone, legal system, and language, those advantages aren’t guaranteed to last.

“Financial hubs rise and fall,” the authors warn. Without bold and timely action, the UK risks falling further behind.

Their message is clear: the UK must establish a clear, fast, and adaptive regulatory framework for the crypto space—before its global influence fades further.

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