Nikolas Sargeant
Former British Chancellor George Osborne has issued a stark warning that the UK risks becoming irrelevant in the global cryptocurrency competition unless it urgently overhauls its regulatory approach. Writing in the Financial Times, Osborne accused the Labour government and Bank of England of institutional hesitation while international competitors establish commanding leads.
Osborne, who served as Chancellor from 2010 to 2016, drew parallels between the current cryptocurrency revolution and the transformative Big Bang financial reforms of the 1980s. Those deregulatory changes, led by then-Chancellor Nigel Lawson, helped establish London as a dominant global financial center through bold policy innovation.
The former Chancellor argued that today's digital asset transformation demands similar regulatory courage and political leadership. His criticism comes as he serves on Coinbase's global advisory council, providing him with direct insight into international cryptocurrency policy developments.
Direct Challenge to Current Leadership's Crypto Strategy
Osborne specifically targeted Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey, arguing their efforts have left Britain trailing global competitors. He highlighted the US, European Union, Singapore, Hong Kong, and Abu Dhabi as jurisdictions moving aggressively to establish comprehensive legal frameworks for cryptocurrencies and stablecoins.
While Reeves has publicly pledged to make the UK "the best place in the world to innovate," Osborne dismissed the government's progress as insufficiently concrete. "The chancellor says she'll 'drive forward' on stablecoins, whatever that means," he wrote, characterizing current policy commitments as vague and inadequate.
Bailey reinforced the Bank of England's cautious stance during last month's Mansion House dinner, reiterating traditional concerns about digital asset volatility and monetary system risks. The central bank has historically insisted that systemically important pound-based stablecoins must be fully backed by central bank deposits earning no interest.
Critics argue this approach makes launching commercially viable pound stablecoins practically impossible, explaining why the UK maintains virtually no presence in the $250 billion global stablecoin market dominated by US dollar-pegged tokens representing 99% of sector value.
International Competition Intensifies Regulatory Pressure
Osborne emphasized how US political leaders, including Donald Trump, have embraced cryptocurrency in policy platforms, creating additional urgency for British action. He urged Reeves to follow the US Congress in establishing clear legislative frameworks rather than delegating responsibility to regulatory agencies.
The former Chancellor's frustration reflects broader industry concerns about Britain's diminishing competitiveness in financial technology innovation. "We became the world's financial centre because we weren't afraid of change," Osborne wrote. "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."
Osborne has consistently championed fintech innovation throughout his career, launching a Treasury review into digital currencies in 2014 to maintain the UK's financial technology leadership position. His current warnings represent escalating concerns about institutional and political hesitation undermining Britain's traditional competitive advantages.
The critique comes as global stablecoin adoption accelerates, with major jurisdictions implementing comprehensive regulatory frameworks that could attract significant cryptocurrency business away from London's financial district.
