Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Cryptocurrency»The BoE’s stablecoin stance could cost the UK its fintech crown
    Cryptocurrency

    The BoE’s stablecoin stance could cost the UK its fintech crown

    August 18, 20255 Mins Read


    The writer is the CEO of Innovate Finance, a fintech industry body

    When the 2008 financial crisis shook the foundations of the global economy, it forced markets to adapt in ways few had imagined. 

    Out of that period of uncertainty, fintech emerged as a fresh, agile force that restored trust, delivered new infrastructure and reshaped how financial services operated. Harnessing and welcoming innovation became a cornerstone of the UK’s position as a global leader in finance.

    Today, a new wave of change is building. Stablecoins — digital currencies pegged to the value of stable currencies such as the dollar — have the potential to reshape payments, savings and market infrastructure. 

    Alongside advances in digital assets and artificial intelligence, they offer the chance to modernise financial services, reducing cost and increasing speed, as well as introducing new functionality such as programmability.

    Every institution in the UK, from regulators and the central bank to private banks and fintechs, will need to be in lockstep if we are to truly capitalise on this.

    However, the UK is falling far short of its potential and is missing a critical opportunity to cement its current and future position as a world-leading financial services centre. The Bank of England’s commitment to traditional models of finance looks out of step while other jurisdictions embrace this transformation, and is at odds with the UK’s growth ambitions.

    This cautious approach threatens to undermine the fintech ecosystem and the broader open approach to innovation that have driven the UK’s competitive advantage and leading reputation in financial services.

    The stablecoin opportunity

    With $237bn of stablecoin currently in global circulation, fintechs and governments of other nations have already begun taking advantage of this pioneering currency. Investors, fintechs and traditional finance firms are developing their stablecoin playbooks as they see the opportunity for cheaper, faster and safer services. 

    It is easy to see why. Stablecoins combine the efficiency of digital currencies with the stability of traditional money. Their cost savings, programmability and transparency make them suited to revolutionise everything from international payments and supply chain management to everyday customer transactions.

    What the UK stands to lose 

    The rest of the world is marching on and taking advantage of the innovations this new currency brings. China, the US, Hong Kong, Singapore and the EU are all implementing regulatory regimes that support the development and establishment of stablecoins, while providing assurance to investors and consumers alike of their security. 

    As global financial infrastructure evolves, there is a real risk that the UK will fail to secure its seat at the table and retain its leading position in global financial services.

    The UK has already ceded the early-adopter advantage. By doubling down on traditional banking rather than exploring the stablecoin opportunity, the UK is losing the chance to lead competitively on the world stage. This is damaging to investment in the UK and directly undermines the chancellor’s aim to make the UK the world’s most technologically advanced financial centre.  

    Urgent action

    Despite this, we have a small window of opportunity to realise a second-mover advantage, learning lessons from first movers to deliver a regime that works. If the UK is not only to catch up with its global competitors, but also take advantage of its rich financial history, regulators must deliver a regulatory regime that takes into consideration three key objectives.

    First, the UK should differentiate itself from other markets. It should incentivise business models not currently allowed elsewhere. For instance, businesses that offer interest or yield to customers who establish a direct commercial relationship with them should be encouraged as a differentiator from our competitors in Europe. However, we will only gain that second-mover advantage if we take the opportunity here and now.

    International competitiveness should not come at the cost of fostering international openness, the second objective. The UK’s regime should allow the trading and use of overseas-issued and overseas-denominated stablecoins. The UK accounts for 40 per cent of FX turnover, trading in the dollar, and it can continue this legacy by becoming the euro-dollar market for stablecoins.  

    Finally, and arguably most importantly, regulators should support the development of UK-issued, GBP-backed stablecoins. To deliver this, they must avoid being overly prescriptive about the nature of the backing assets and the proportion of bank deposits within them.  

    The UK has a huge opportunity to set a distinctive approach to stablecoins and digital assets that is competitive, pro-innovation and provides the protections that investors and consumers want.  

    The UK built the best fintech community in the world, and cemented its financial services leadership, by recognising opportunities early, embracing innovation and acting boldly.  

    Stablecoins represent the next chapter of our sector, and progressive action is needed immediately if the UK is to maintain its world-leading position. As digital assets are set to form the foundation of the next wave of financial services, the UK must act quickly and decisively to secure its seat at the table. That time is now.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    New Crypto project gains hype: Could it be the next big Cryptocurrency? Experts says yes

    Cryptocurrency

    How Do Bitcoin And Blockchain Work Together To Shape The Future Of Money?

    Cryptocurrency

    CIBN to explore future of finance with digital currencies, evolving frameworks

    Cryptocurrency

    XRP Trends Hot, Okalio Cloud Mining Says It’s the Most Valuable Cryptocurrency

    Cryptocurrency

    Major crackdown freezes over $300 million in cryptocurrency stolen from scams

    Cryptocurrency

    How to Avoid Capital Gains Tax on Cryptocurrency

    Cryptocurrency
    Leave A Reply Cancel Reply

    Top Picks
    Cryptocurrency

    Bitcoin Remains Below $65,000, WazirX Breach Concerns Investors

    Property

    HTB lifts maximum lending to £35m for property professionals  – Mortgage Strategy

    Commodities

    9 New Rock + Metal Tours Announced This Past Week

    Editors Picks

    Etana Energy signe un nouveau contrat de fourniture d’énergie aux industriels sud-africains

    March 18, 2025

    Stock market today: Live updates

    July 18, 2024

    Quebec man charged for fraudulent $3-million cryptocurrency investment schemes

    April 9, 2025

    Aventura condo association president charged with money laundering bonds out – WSVN 7News | Miami News, Weather, Sports

    October 23, 2024
    What's Hot

    Crude oil futures decline as US inventories increase

    July 2, 2025

    Le géant des stablecoins Circle veut devenir une banque (et pourquoi ce n’est pas un hasard)

    July 2, 2025

    Phantom Wallet Enables Crypto Buys with Apple and Google Pay

    August 23, 2024
    Our Picks

    As retirees, should we invest in rental property or investments for extra income?

    August 11, 2025

    L’électrolyseur du projet E-CHO, l’un des plus gros du monde, met le débat sous tension

    April 9, 2025

    Kristen McGregor takes a giant leap towards Ms. Olympia qualification with silver medal at Wings of Strength Contest

    July 14, 2024
    Weekly Top

    How Do Bitcoin And Blockchain Work Together To Shape The Future Of Money?

    August 18, 2025

    How copper could improve brain health, fight Alzheimer’s, and aid memory and concentration

    August 18, 2025

    Property asking prices fall by £10k in three months

    August 18, 2025
    Editor's Pick

    Night-time habit could save households ‘hundreds’ on energy bills, expert say

    August 16, 2025

    Outcrop Silver proposera un appel public à l’épargne de 5 millions de dollars -Le 21 mars 2025 à 16:06

    March 21, 2025

    Will Voters Agree to Max Out School Property Taxes Amid Budget Crisis? Austin ISD asks residents to support a property tax increase – News

    August 22, 2024
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.