Osborne believes UK crypto idleness will cause it to miss out on stablecoin boom
The UK risks missing out on the second ‘crypto wave’ – stablecoins – due to a lack of proactivity from government and regulatory officials, according to former Chancellor George Osborne.
In an opinion piece for the Financial Times, Osborne took issue with current Chancellor Rachel Reeves’ inconclusive “drive forward” plans for stablecoins, whilst questioning the belief Bank of England Governor Andrew Bailey would be in support of a pound-backed stablecoin.
“The chancellor says she’ll “drive forward” on stablecoins, whatever that means, while the Bank of England’s governor remains unconvinced that commercial banks should issue them. This hesitation risks irrelevance,” he wrote.
“And Britain? We’re still deliberating.”
The crux of Osbourne’s op-ed took aim at the fact the UK is lagging behind competitors and is likely to miss the next crypto boom phase if regulation and standards are not developed.
Osborne’s concerns come following the recent passing of three new digital asset bills in the US. In July, President Trump signed the GENIUS Act into law, with the CLARITY Act and the Anti-CBDC Surveillance State Act making rapid progress through the Senate.
In addition, the European Union (EU) implemented the Markets in Crypto Assets (MiCA) regulation of digital assets more than 12 months ago, albeit with few institutions being granted a licence.
Osborne, who was chancellor under Prime Minister David Cameron in 2010-2016, also highlighted developments from Singapore, Hong Kong and Abu Dhabi. All three regions, he wrote, have developed comprehensive crypto and digital asset bills which have seen major crypto firms set up shop.
The stablecoin opportunity
It was clear from his opinion that Osborne believes stablecoins will become the second growth phase of crypto’s ascent into the mainstream.
He noted the proliferation of national regulatory frameworks and use cases for cross-border settlements had caught the attention of key global payment players such as Visa and Mastercard.
“Having missed the first crypto wave, we’re about to miss the second: stablecoins,” said Osborne. The first ‘wave’ Osborne was referring to was Bitcoin – which over the last decade has become the most valuable asset.
But Osborne now asserts “that window has now closed” for Bitcoin, as UK scepticism has, and continues to, exist.
With USD-backed stablecoins accounting for 99% of the current $250bn stablecoin market value, companies such as Tether and Circle, issuers of USDT and USDC respectively; the two largest stablecoins in the world, are being incentivised to remain at home and continue USD’s dominance of the market.
Osborne warned that if UK’s policymakers continue to be less aggressive with plans to regulate its digital asset sector, the British pound “won’t even play a supporting role” due to USD’s control of the stablecoin market.
“Blaming regulators is a lame excuse,” said Osborne. “Ministers should act to set the framework of law, as Congress has.”
“On crypto and stablecoins, as on too many other things, the hard truth is this: we’re being completely left behind. It’s time to catch up.”
Is the UK being left behind?
While Reeves has announced a new regulatory roadmap for stablecoin legislation, no date for said legislation nor formal rules have begun to be debated by the British government.
Osborne believes this stalling has caused issues with accessibility to digital assets, despite investor appetite continuing to perform well amid boundaries to access.
The UK government issued a report which revealed 12% of the population have, or currently own, a form of cryptocurrency. However, there are certain restrictions, such as the banning of ‘on-ramp’ fiat conversions by high street banks, and limited access to exchange traded funds (ETF) of assets like Bitcoin for interested investors.
Osborne acknowledged the progression made in the US by regulating Bitcoin and Ethereum ETFs to open access to mainstream retail investors and gain further understanding of crypto assets.
“If you live in New York or Nebraska, you can buy a bitcoin ETF from BlackRock. It’s their most successful ETF,” said Osborne.
“But in London or Leeds, you’re banned from doing so if you’re a retail investor. This hasn’t stopped over eight million Britons buying crypto; it just means the companies handling this wealth are overseas.”
With Osborne sitting on the board of Coinbase as an advisor, as well as holding a similar advisor role at BlackRock, he is now urging ministers to act before the country’s leading financial market status slowly dissipates.
