Cryptocurrency and FinTech executives say Great Britain has become an unwelcoming place for their businesses.
That’s according to a report Wednesday (April 30) by CNBC, citing interviews with industry leaders who say the United Kingdom risks losing companies to other tech hubs if it can’t solve regulatory and funding issues.
Jaidev Janardana, CEO of British digital bank Zopa, told the financial news network that the U.K. was, a decade ago, at “the forefront in terms of promoting competitiveness and innovation,” but is now more concerned about “prioritizing safety and soundness” at the expense of growth.
“If I look at the speed of innovation, I do feel that the U.S. is ahead — although they have their own challenges. But look at Singapore, Hong Kong — again, you see much more rapid innovation,” Janardana said. “I think we are still ahead of the EU, but we can’t remain complacent with that.”
The report notes that the U.K. has a robust FinTech sector, with companies like Revolut and Monzo vying to challenge traditional banks. Observers in the industry say these firms have succeeded in part because of pro-innovation rules that made it easier for tech startups to get banking and electronic money service licenses.
However, crypto companies say they are frustrated that their own industry hasn’t enjoyed the same pace of progress, CNBC added.
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“Other jurisdictions have started to seize the opportunity,” said Cassie Craddock, U.K. and Europe managing director at blockchain company Ripple.
Among those jurisdictions is the U.S., which has taken on a much more pro-crypto position since President Donald Trump took office. Trump has pledged to make the U.S. the world’s crypto capital while the Securities and Exchange Commission (SEC) has withdrawn or paused several high-profile legal cases against crypto businesses.
The EU, meanwhile, has paved the way for establishing clear rules for the crypto sector with its Markets in Crypto-Assets (MiCA) regulation.
“The U.S. is driving global tailwinds for the industry,” Craddock said. “MiCA came into force in the EU at the end of last year, while Singapore, Hong Kong and the UAE are moving full steam ahead with pro-industry reforms.”
The report came one day after the British government released draft proposals for regulating crypto firms. But, CNBC points out, industry insiders say there’s still work to be done in addressing more complicated technical issues, like reserve requirements for stablecoins.
