The UK's ambition to become a leading global digital asset hub is being hindered by political inertia and regulatory fragmentation, according to Jonny Fry, a blockchain researcher and CEO of TeamBlockchain Ltd. Despite the Financial Conduct Authority's (FCA) public assurances of progress, industry insiders report bureaucratic barriers and legislative friction are delaying the implementation of a unified crypto framework. Fry warned that the real risk is not firms leaving Britain, but the next generation of digital asset infrastructure being built elsewhere. The fragmented approach between HM Treasury, the Bank of England, and the FCA has created deep operational uncertainty, particularly around the 'singleness of money' across tokenized deposits and digital assets. This has already pushed firms like Deribit to relocate, costing the UK government hundreds of millions in tax revenues. While FCA Director Matthew Long presents the regulatory timeline as a calculated rollout, Fry cautions that without agility, the UK may face 'dollarisation' as transactions settle in US dollar-backed stablecoins. Regulations are set to take effect in October 2027.

Key facts

• UK crypto regulation delayed by bureaucratic barriers and legislative friction.
• Fragmented approach among Treasury, Bank of England, and FCA causes uncertainty.
• High-profile firms like Deribit relocate due to lack of regulatory clarity.
• Risk of 'dollarisation' if UK fails to offer competitive digital pound.
• FCA's controlled testing environments criticized as insufficient for market needs.