The UK’s Moment: From Innovation Enabler to Global Leader in Digital Finance
Written by Ian Taylor, Board Director, CryptoUK
The conversation around digital finance in the UK has never felt more urgent — or more promising. There’s a growing sense that the country is on the brink of a defining transition: from supporting innovation to actively leading it.
Across the financial ecosystem, institutions are exploring digital assets, tokenisation and programmable money at an accelerating pace. Regulators are becoming more open, and policymakers increasingly recognise that innovation in financial markets is not just an opportunity — it’s a strategic necessity.
But the question now is not whether the UK can lead — it’s whether we will create the conditions that allow us to do so sustainably.
Turning Progress into Leadership
The UK has made tangible progress in recent years through its collaborative regulatory approach, with both the Financial Conduct Authority and the Bank of England showing greater willingness to engage directly with industry. There’s an improved feedback loop between innovators and regulators — something that would have felt unlikely even a few years ago.
Yet the challenge remains broader than regulation alone. The UK needs to go further in supporting the next generation of founders, technologists and policy specialists — particularly by addressing persistent challenges around talent retention and business scaling. Innovation requires not only a clear regulatory framework, but also the right environment for growth — one that encourages companies to stay and build here, rather than seeking opportunity elsewhere.
If we are serious about leadership, we need joined-up policy — across education, immigration, taxation and investment — to make Britain not just a hub for innovation, but the best place in the world to grow a digital-finance business.
A Transatlantic Imperative
The importance of the UK-US corridor featured strongly in discussions at the SALT Conference in London this month, where I joined Lord Iain McNicol of West Kilbride, Baroness Kay Swinburne and Lord Nat Wei to explore how both markets can work together to foster financial innovation. There is growing alignment on the need for transatlantic cooperation — not just to harmonise regulation, but to create an environment in which institutional adoption of digital assets can thrive.
This balance between innovation and financial stability is also central to the Bank of England’s latest consultation on sterling-denominated systemic stablecoins, published this week. By proposing to allow up to 60 per cent of reserves in UK government debt, the Bank has signalled a willingness to support payments innovation while maintaining strong safeguards.
Much of the community’s reaction has focused on the proposed holding limits. It’s important to clarify that these apply only to GBP-denominated stablecoins, which currently make up less than 0.1 per cent of global issuance — compared with about 99.5 per cent for USD-backed assets. In practice, the short-term effect is limited, but the principle matters. Temporary limits can help establish stability, but if the UK is serious about becoming a global leader, these restrictions cannot remain indefinitely. Moreover, the definition of when a stablecoin becomes systemic remains unclear — a lack of clarity that could create uncertainty for issuers and slow innovation. Clear thresholds and predictable criteria will be essential if the sector is to grow responsibly and competitively.
Rethinking Regulation
The need for a modern, fit-for-purpose regulatory framework was another recurring theme throughout London’s discussions. There is a growing view that the FCA’s structure could evolve to create two distinct divisions: one focused on consumer protection, and another on wholesale and capital-markets activity. A more specialised model could give innovation in areas like tokenisation and decentralised finance the space it needs, while maintaining strong oversight for retail users.
A similar point was raised during a panel on Enterprise Tokenisation of Real-World Assets, moderated by my CryptoUK colleague Su Carpenter, with Gregg Bell (Chief Business Officer, Hedera), Allan Trimmer (Head of Product, Aberdeen) and Graham Rodford (CEO & Co-founder, Archax). Their discussion highlighted how institutional appetite for tokenisation is accelerating, but also how success depends on regulation that can evolve in parallel with enterprise adoption.
It’s interesting to see comparable debates taking place elsewhere. In the United States, a new Senate draft bill introduced this week proposes giving the Commodity Futures Trading Commission (CFTC) primary oversight of much of the digital-asset market — a redistribution of responsibilities between agencies. Both efforts share the same intent: clarity of mandate to foster innovation. The difference lies in execution — the US is debating which regulator should lead, while the UK is focused on how to make its existing model more adaptive.
Keeping Momentum
My main reflection is that the UK has much of the groundwork in place. The regulatory tone is improving, institutional engagement is rising, and global peers increasingly look to the UK as a model for balanced innovation.
Now we need to convert that intent into measurable outcomes. That means moving from consultation to implementation, scaling the businesses already leading in this space, and ensuring that regulation evolves at the pace of technology.
The discussions in London were a reminder that leadership is earned through delivery, not ambition alone. If we can maintain this spirit of collaboration — between government, regulators and industry — then the UK will not only remain competitive, but define the next chapter of financial modernisation.
At CryptoUK, we are proud to be helping shape this next phase — working with members across the ecosystem to advocate for smart regulation, drive education and ensure the UK remains a world leader in digital assets and innovation. If your organisation shares that vision and wants to play an active role in building the UK’s digital future, we’d love to collaborate. Learn more about becoming a member here.
Meanwhile, we’re also proud to act as the Secretariat to the Crypto and Digital Assets All-Party Parliamentary Group (APPG), supporting cross-party dialogue on the future of this sector and helping policymakers develop evidence-based approaches to regulation. Those interested can follow the APPG’s progress and updates here.
