The UK has the potential to become the world’s next crypto hub
Attitudes towards crypto are very complex worldwide, and while some jurisdictions regard the assets positively and want to work with them, others are reluctant to integrate them into their established financial systems. There are also some that have banned digital assets altogether, believing them to be disruptive and to have a negative influence. However, more and more countries from around the world are starting to focus on the benefits of cryptocurrencies instead of the potential issues, believing that there are ways to incorporate the assets and expand monetary landscapes with their help and assistance.
The UK is one of the latest additions to this group, but the nation has always been crypto-friendly. The government recognises digital assets as a form of property, but they aren’t regarded as legal tender. Buying, trading, and selling top cryptocurrency tokens is not an issue as long as regulations are followed and illicit ventures are avoided. Bitcoin and other altcoins cannot be used in the same way as standard currency, but they can form part of an investment portfolio. Experts believe that conditions for cryptocurrencies in the UK are likely to improve in the foreseeable future.
Safe harbour
UK Chancellor of the Exchequer Rachel Reeves revealed plans for a much more complex and comprehensive regulatory regime that could foster the state’s reputation as a global leader in crypto finance. Exchanges and agents will be subjected to the same regulations as standard financial companies, with transparency being one of the key requirements. The platforms will also have to guarantee consumer protection and continuous operational resilience. Crypto trading, staking, and custody are set to become regulated as well, among several other blockchain-based activities.
Showing that it is willing to guarantee regulatory clarity makes the United Kingdom a safe harbour for crypto adoption and responsible innovation. Furthermore, the framework could also make the marketplace more predictable and ensure that the industry remains scalable and efficient. Liquid and delegated staking services will have to register, with solo stakers and providers that are wholly interface-based being exempt. There are some DeFi nuances that still need to be adjusted, but the general direction is moving toward tailored compliance rather than restrictions.
ETNs
ETNs, or exchange-traded notes, are a type of debt security that trades on stock exchanges. They are similar to stocks but are structured as unsecured debt obligations of the issuers, which are generally financial institutions. The assets keep track of the performance rates of different holdings without holding the assets themselves. Lifting the ban on crypto ETNs will enable British investors to make their own choices when it comes to the assets.
The UK’s Financial Conduct Authority reversed the ban on retail access to cETNs, with the changes expected to take effect in October. The ban was previously enforced in January 2021 as a result of the considerable volatility associated with the assets and the low investment need. Removing this policy indicates that regulators are moving towards a more positive view of crypto, with experts believing that the attitude shift stems from a better understanding of blockchain-based assets and all that they entail.
But while the FCA reversed the ban on ETNs, it has also pointed out that crypto derivatives remain banned. This category includes options, futures, and perpetual contracts, with the lawmakers adding that the market will remain monitored so that developments are taken into account in case a different approach can be adopted in the future.
More owners
Binance.com co-founder Yi He believes that “Crypto isn’t just the future of finance – it’s already reshaping the system, one day at a time.” And there’s no better way to see exactly how the market continues to grow and evolve than by having a look at ownership trends. In this regard, the United Kingdom has recorded the sharpest growth in new users in spite of not adopting its own MiCA equivalent. 2025 marks the first year when crypto ownership began to pick up speed, with the number of new crypto owners surpassing that of many other economies, including the United States.
The United Kingdom isn’t at the top of the list yet, though, with that position currently belonging to Singapore, which has remained uncontested for the past two years. In the European Union, France also saw an increase in the number of crypto owners, reflecting the shifting regulatory environment for digital assets. Most analysts believe that the steep spike in crypto ownership reflects the fact that the United Kingdom has been a financial hub for decades, so it only makes sense that the people would feel inclined to join this new and promising marketplace.
Institutional investors
The rate at which institutional investors are joining the crypto ecosystem has been increasing over the last few months as the holdings are now regarded as being safer and much more reliable. The British public is already showing signs of embracing crypto in larger numbers and looking to integrate it into the mainstream, but in this case, it is the businesses, enterprises, and organizations that have to keep up. About 7 million users own cryptocurrencies in the UK, 10% more than three years ago. A recent study suggests that people would like to see a bridge between cryptocurrency and fiat for those who need it, as over 40% of crypto owners report converting their digital assets to standard currencies.
As more people start owning crypto, the approach to the assets will also become more strategic and sustainable, as individuals begin to view them as a long-term investment with potential for value instead of something to be traded quickly for a quick profit. This is also one of the reasons why stablecoins have become more popular in recent years, including in the UK.
To sum up, the UK crypto market has considerable potential for growth and development and has already begun to pick up speed. Investors are advised to remain cautious and avoid impulsive decisions that could result in significant capital losses over time.
The editorial unit
The material contained in this article is of the nature of general comment only and does not give advice on finance or any particular matter. Recipients should not act on the basis of this article’s information without taking appropriate professional advice.
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