Blockchain firm Ripple believes the United Kingdom can become a leader in the crypto sector. The company executives shared this view at the recently organized UK Digital Assets Summit in partnership with Innovate Finance and the UK Centre for Blockchain Technology.
According to Ripple Europe Policy Director Mathew Osborne, who wrote about the event, the UK already has the advantage of being one of the top financial services centers globally with expertise in various areas. Thus, the country only needs to enact the right regulations.
Osborne noted that other jurisdictions, such as the European Union, Hong Kong, and Singapore, have already outdone the UK in regulating the crypto industry. However, he believes the UK has a second-mover advantage and can learn from these jurisdictions to create a better regulatory regime.
He said:
“The UK now has a ‘second mover advantage’, as it can learn from the experiences of other jurisdictions and introduce a regulatory regime that supports the benefits of digital assets as well as mitigating the risks.”
These comments echo panelists’ views at the summit, who believe that the UK needs to move fast with its crypto industry regulation, as clarity remains crucial for participants. They noted that such regulatory clarity could have several advantages for the UK, such as 24/7, faster and more efficient settlements for local and cross-border transactions, and more capital inflow into the country.
At the root of it, they believe that if the UK should have clearer rules on digital assets, it could become a global crypto hub where consumers enjoy more protection as the standards of firms in the sector will improve.
Panelists bemoan slow crypto regulation in the UK
The call for rules enabling the crypto industry in the UK is not new. Although the Financial Conduct Authority already has some rules, industry participants believe more regulatory clarity is needed to encourage adoption.
The report said:
“Panelists reflected that progress so far has been fairly piecemeal, and a bold, ambitious and comprehensive approach is needed.”
Some of those complaints also involve the FCA’s low approval rate for crypto licenses. Although the regulator has granted approval to Coinbase, PayPal BlackRock, and Galaxy, its approval rate of only 14% means several companies, including Ripple itself, remain without a license.
Unsurprisingly, Ripple complained that banks in the country are unwilling to work with it because there is no regulatory framework. According to Cassie Craddock, the managing director for Ripple Europe and UK, large banks have yet to embrace Ripple due to regulatory uncertainty.
Ripple calls for rules enabling stablecoins and tokenization
Meanwhile, Osborne said panelists at the summit identified stablecoins and tokenization as the two main products crucial to the UK’s growth as a digital assets hub. He said the UK needs to have laws that enable these products and create an environment enabling stablecoin usage, including stablecoins not issued in the country.
Stablecoin is currently a $230 billion sector with more potential for growth and lots of regulatory interest worldwide. Although the UK already has a roadmap for crypto regulation, with a consultation paper on stablecoins set for the first half of 2025, the Ripple executive wants the FCA to fast-track it.
Additionally, he mentioned the potential of tokenization to transform the market and called on the UK government to move fast on enabling tokenization so the country can gain from it. He noted that all it would take is to remove all the barriers to it, which are mostly regulatory and legal.
