.svg)
A coalition of payments and crypto groups wants the UK government to adopt a more crypto-friendly stance, warning that rival jurisdictions are taking the lead in the global race to attract investment and innovation in digital assets.
The UK Cryptoasset Business Council, Global Digital Finance, The Payments Association, the Digital Currencies Governance Group, the Crypto Council for Innovation and techUK have written an open letter addressed to Varun Chandra, the Prime Minister鈥檚 special advisor on business and investment and a former investment banker.
In the letter, the bodies outline what they feel are the economic benefits of blockchain technology.
They urge the Labour government to take decisive action to cement the UK鈥檚 position as a global leader in financial technology, arguing that the UK must act swiftly to remain competitive against jurisdictions.
鈥淩ecent geopolitical events, namely the election of Donald Trump, have precipitated a global digital race to capture the economic and societal benefits of this new wave of technology,鈥 the letter says.
In the letter, the trade bodies point out that jurisdictions such as Singapore, the United Arab Emirates (UAE) and Hong Kong have implemented government-led strategies to attract and onshore such businesses.
鈥淚t is vital that the UK is cognisant of these developments and remains flexible and proactive in its approach,鈥 the letter says.
鈥淚n this regard, the UK鈥檚 positive commitment to a US-UK economic trade deal focused on technological cooperation presents a significant opportunity to mirror the United States鈥 ambition in fostering leadership in blockchain, digital assets, and other emerging financial technologies.鈥
Proposals for action
The coalition sets out several recommendations for the UK government, including:
- Regulatory and government collaboration, so that there is a structured engagement forum to improve policymaking and guarantee that the UK remains at the forefront of blockchain development.
- A government roadmap providing an action plan to attract investment and integrate blockchain technology into the public sector, similar to initiatives already undertaken for artificial intelligence (AI).
- Appointing a blockchain envoy so that there is a government representative to coordinate policy, drive innovation and signal the UK鈥檚 commitment to digital assets on the global stage.
- Greater collaboration between emerging technologies to drive innovation across multiple sectors, recognising synergies with quantum computing and AI.
The letter suggests that blockchain technology could contribute 拢57bn to the UK economy over the next decade.
It cites research from the blockchain company Chainalysis, which found that the UK received 拢172bn in on-chain transactions between July 2023 and June 2024, making it the largest digital asset economy in Europe.
鈥淭he UK is uniquely positioned to develop forward-thinking policies and regulations that enable value creation and fair distribution,鈥 the letter says.
Despite this strong market position, the letter warns that the UK risks falling behind in attracting venture capital investment.
For example, it notes that only 8 percent of global venture capital funding into blockchain-related firms currently flows into the UK, compared with significantly larger shares going to the US and Asian jurisdictions.
鈥淏ritish culture, rooted in individualism, creativity, and independence, aligns well with the innovative principles driving emerging technologies, like Web3,鈥 the letter says.
It goes on to say that the UK is 鈥渓arge enough to have meaningful influence yet agile enough to implement well-calibrated regulations more swiftly than the EU鈥.
The trade bodies argue that whereas 鈥渟ome jurisdictions have struggled to provide regulatory clarity, leading to uncertainty and an exodus of innovators, the UK is making tangible progress in crafting a clear and proportionate regulatory framework鈥.
The impact of the intervention remains to be seen, but given its commitment to growth, the Labour government may well be open to exploring the potential of emerging technologies such as digital assets and blockchain.
