Almost a dozen industry bodies have warned the Chancellor against delaying plans to develop a central strategy on the regulation and adoption of cryptocurrencies and digital assets, ahead of a crucial parliamentary vote.
Senior figures from organisations including Innovate Finance, TheCityUK and TechUK urged John Healey to reaffirm his commitment to publishing the government-led digital finance blueprint within 12 months, warning that Britain risks squandering its natural advantage in the sector should the plans fail to pass next week.
Industry calls for 'north star' strategy
"A strategy would provide the necessary 'north star', giving businesses and investors greater confidence and signalling in the UK's long-term direction," the industry chiefs wrote in a letter seen by City AM, adding: "Other jurisdictions are moving rapidly to attract digital-asset businesses, investment and talent. The UK should not assume that its existing strengths will automatically translate into long-term leadership."
Under its landmark Financial Services and Markets Bill, the government is required to prepare, publish and consult on a new strategy for the regulation of digital assets. The strategy, which emerged from a Conservative party amendment following initial resistance from the government, was widely regarded as a significant boost for the crypto and stablecoin industry after a lengthy lobbying campaign.
Concerns over Clause 50
Under terms agreed to by Rachel Reeves' Treasury, ministers confirmed the blueprint would examine areas such as the government's "approach to the regulation of digital assets", the frameworks in place amongst international counterparts and the balance between protections and growth. Findings from the strategy should be published and consulted on within a year, the bill stipulated, as reported by City AM.
However, there is mounting concern in the stablecoin and crypto sector that the Treasury may seek to use its substantial Commons majority to water down or postpone the plans at a crucial Commons vote next week. Specifically, the industry bodies called on the government not to remove 'Clause 50' from the bill, which compelled ministers to complete the blueprint within a year.
At a Lords debate in September, investment minister Lord Pitt-Watson said the 12-month deadline was redundant and meeting it risked "cutting across work currently under way" at regulators and government departments.
Calls to retain the clause
Katie Harries, director of policy at Coinbase, urged the government to retain the clause and "deliver the strategy the sector has been calling for". She called it "A 'north star' to provide certainty, direction and a shared ambition for the UK's digital asset sector", and added: "Regulation is one important piece of the puzzle."
Shadow City minister Mark Garnier said: "The government must get behind this successful amendment to publish a digital assets strategy, and demonstrate the UK's commitment to the next generation of financial instruments. To do otherwise would be a profound mistake."
Financial regulators are already wrestling with how best to supervise the emerging crypto and stablecoin sectors, which have expanded rapidly to become a fundamental component of investor portfolios and payments systems. Supporters contend that heavy-handed regulation could threaten the industry's growth prospects, while critics caution that insufficient oversight could leave investors and the financial system exposed to a speculation-driven collapse.
The Bank of England is expected to complete its stablecoin regime – which governs the increasing number of blockchain-based currencies tied to a standard currency – later this year. The government was approached for comment.
