U.K. Crypto Regulations Face Delays as Digital Asset Firms Look Abroad

The U.K.’s ambition to become a leading global digital asset hub is facing growing pressure due to slow-moving crypto regulations and institutional delays. Industry experts warn that regulatory uncertainty is driving blockchain innovation and crypto investment toward more agile jurisdictions such as the U.S. and the European Union.

Jonny Fry, CEO of TeamBlockchain Ltd. and founder of Digital Bites, told CoinDesk that Britain’s biggest threat is not companies leaving the country, but rather the possibility that future digital asset infrastructure will be developed elsewhere. According to Fry, fragmented responsibilities between HM Treasury, the Financial Conduct Authority (FCA), and the Bank of England are creating major obstacles for the U.K.’s crypto sector.

Fry explained that the Treasury is shaping legislation while the FCA oversees publicly issued stablecoins and the Bank of England explores a digital pound. This lack of coordination has created operational uncertainty around tokenized deposits, stablecoins, and digital assets, making it difficult for businesses to plan long-term operations in the U.K.

The slow pace of crypto regulation has already pushed major firms to seek opportunities overseas. Fry pointed to crypto derivatives exchange Deribit as an example, suggesting the company may have relocated to Britain if there had been clearer guidance on crypto staking regulations. He added that the missed opportunity potentially cost the U.K. government hundreds of millions in tax revenue following Coinbase’s acquisition of Deribit.

Despite criticism, FCA officials maintain that the regulatory rollout is designed to create a secure and sustainable crypto framework. Matthew Long, Director of Payments and Digital Assets at the FCA, stated that the U.K. is “open for business” and encouraged crypto firms to engage with its pre-application support services.

However, concerns remain that delayed regulation could increase reliance on U.S. dollar-backed stablecoins, potentially accelerating “dollarisation” in digital finance. Current U.K. crypto regulations are expected to take effect in October 2027.