Coinbase’s impending arrival on the S&P 500 has UK crypto and digital asset leaders questioning the country’s commitment to fueling similar growth transpiring in the US.
On May 12, S&P Dow Jones confirmed Coinbase will join the S&P 500, becoming the first cryptocurrency exchange on the index. The company will officially join next Monday (May 19) in a landmark moment for US crypto growth.
Upon the announcement, Coinbase shares jumped 29% in 24 hours and are currently valued at $258.30 at the time of writing (14 May).
The crypto exchange will replace Discover Financial Services which is in the midst of being acquired by Capital One Financial, with Coinbase set to join before trading begins on Monday.
Sharing his thoughts on the landmark crypto moment, Nick Jones, CEO of UK-based digital assets company Zumo, believes this is a “huge moment” for crypto’s continued rise into the mainstream.
“This is a huge moment for crypto’s move into the mainstream – and the UK should be watching developments closely,” said Jones.
US’ global leadership aspirations
Coinbase CEO Brian Armstrong has been a vocal supporter of addressing the US’ regulatory framework around crypto and digital assets, holding meetings with President Donald Trump before his election win last November and backing pro-crypto campaigns with up to $50m in donations.
Having been embattled by the US Securities and Exchange Commission (SEC) under the previous Joe Biden administration, the US crypto sector became a lot more optimistic of innovative changes to regulation and competitive growth with the arrival of Trump as President, a strong advocate of the sector.
Within his first 100 days in office, Trump has galvanised the crypto space by announcing new executive orders and the descaling of perceived restrictive regulations to support the growth of crypto companies like Coinbase.
In his bid to help establish the US as a global leader in crypto and digital assets, Trump signed an executive order to announce a Bitcoin federal reserve, repealed an IRS rule that would have shared crypto company tax information the same as traditional finance firms, and thrown out outstanding SEC lawsuits against the likes of Coinbase and Ripple Labs.
While Jones acknowledges that under Prime Minister Keir Starmer’s leadership the UK has continued work to develop its own crypto regulatory framework, he fears the country could fall behind the US if market competitiveness lags behind.
“Digital assets are becoming increasingly woven into the institutional fabric. HM Treasury and the Financial Conduct Authority (FCA) are now working on creating an appropriate regulatory regime for crypto assets to help the UK economy take advantage of the growth opportunities on offer,” he said.
“But in the meantime, the UK is conspicuously lacking the deals done, the positive announcements, and the product and institutional movement seen in the US – and even the EU.”
While the US’ hopes to pass the Genius Act – the overarching piece of legislation which would regulate cryptocurrencies and digital assets – stalled last week after failing to pass a vote in the Senate, it appears the UK’s transatlantic neighbour is moving forward much more quickly.
Is the UK acting in the same manner?
On April 30, the UK’s chancellor Rachael Reeves issued fresh draft proposals to regulate the ‘cryptoasset’ space for the first time. The regulations outlined included rules on more transparency to customers, clear guidelines on the risks of investment and which cryptoassets are deemed suitable for the UK market.
Included in the ‘Plan For Change’ Reeves announcement were also rules surrounding the regulation of stablecoins and issuers, which revealed that the UK would take a more relaxed approach when it comes to the likes of Tether’s USDT or Circle’s USDC entering the UK.
While this may have brought new optimism to the country’s crypto sector, there has yet to be any official date on when a vote can take place in Parliament regarding the regulatory framework.
There are also certain crypto rules and restrictions set in place by the FCA, such as the Travel Rule and measures set in place to enforce safety guidelines around the marketing of digital asset products.
“I would urge UK policymakers to now move quickly with intent, and in tandem with industry views gathered through their consultations, to ensure that we’re not written out of the global crypto script,” added Jones.
The UK has bolstered efforts to embrace the crypto sector more in the past several years, but with US competitiveness growing with the Coinbase S&P 500 announcement, as well as the European Union (EU) already launching its own regulatory framework with MiCA (Markets in Crypto Assets) last year, it appears the country is behind on both fronts.
