The UK has one of the most vibrant crypto retail markets in the world - it needs to capitalise on it

The value of the global cryptocurrency market recently reached $4 trillion for the first time, with retail investors all around the world eyeing up the exciting new opportunities on offer. 

In Spain, BBVA has unveiled its cryptocurrency trading and custody service for Bitcoin and Ether, which is now available to all retail customers of legal age in the country. 

And in the US, which is rapidly securing its leadership in the digital assets sector, President Trump is preparing to sign an executive order that would open up the $9 trillion retirement market to crypto and other alternative investments. 

It was therefore particularly disappointing that there was no mention of crypto in the Chancellor’s recent Mansion House speech. This was yet another missed opportunity to provide greater clarity but investment crypto assets – and the very real existing consumer demand to access them – were studiously ignored. 

There is now a very notable divergence between the aggressive discourse about encouraging retail investment appetite and risk-taking through, for example, relaxed conditions on mortgage lending while bypassing crypto as an asset class of choice for the younger generations especially. Something just doesn’t add up, and as with many topics, there is a risk of failing to address what matters most to people. 

Tapping into consumer demand and a legacy of regulatory excellence

It's a shame because the UK is actually one of the best places in the world to do crypto business.

There is a strong and growing consumer appetite for crypto assets, with previous Zumo research revealing UK ownership rates approaching 40% across younger cohorts. And according to Chainalysis, the UK still counts as one of Europe’s biggest crypto economies. 

The Financial Conduct Authority’s (FCA’s) own figures, meanwhile, have shown that 12% of all UK adults now own crypto; and with 26% of UK adults who don’t currently own crypto assets saying they would be more likely to buy if the sector is regulated, it’s clear consumers are crying out for regulated access. 

The foundations to underpin a robust regulatory framework are also firmly in place, with the future regime set to leverage the UK’s prized reputation when it comes to financial services and legal and regulatory matters. As one example, the digital assets property bill passing through parliament and draft trust requirements for crypto asset safeguarding will ensure the right custodial safeguards are in place and that the UK has one of the most rigorous frameworks in the world for crypto asset custody and ownership.

UK regulatory bodies have continued to welcome industry input and consultation and this industry-led approach, and emphasis on principles rather than prescriptiveness, has worked in the UK’s favour in preliminary crypto pieces like the Travel Rule.  On top of this, innovative arrangements, such as the UK branch-subsidiary model, are providing the right pathways for continued access to UK markets by global businesses. 

However, while the right building blocks are undoubtedly there, UK policymakers’ current approach is a little too scattergun, led by a government too focused on incumbent financial plumbing upgrades and not enough on the undeniable market signals of the crypto asset investment opportunity.

Ask a person on the street and they are unlikely to be inspired by an on-chain UK gilt. But they may well be interested in the basic crypto products from which the UK retail investor still remains locked out of, or comparatively underserved: Bitcoin ETF holdings in a tax sheltered ISA. Easy access crypto investment through their banking app. A pound-sterling stablecoin worthy of the name. People want a better financial future and crypto is a part of that.

In the meantime, businesses across the crypto asset sector are now looking to financial regulation authorities to show more cohesiveness, decisiveness, and a clearer route to market. 

The UK market is packed full of active customers and demand for businesses to capitalise on – and a reputation others look to. As institutions, and as a collective, we need to stop shying around the topic and put crypto on the UK map and in public discourse. 

The signs are good. It’s time to capitalise and get it done.