The UK’s crypto policy problem is not limited to unfinished rules. The bigger issue is fragmented oversight that leaves firms unsure which authority will shape the final framework. Responsibilities are spread across the Treasury, the Bank of England, and the Financial Conduct Authority, with blurry lines between payments and investment regulation. Businesses want clarity quickly, but public-sector progress has been slow.
Treasury, central bank, and FCA are moving on separate tracks
According to Fry, the current structure is piecemeal: the Treasury is drafting legislation, the FCA is focusing on public-sector stablecoin work, and the Bank of England is advancing the digital pound. He said that this split approach creates deep operational uncertainty for companies. The issue goes beyond compliance paperwork. It also touches the monetary system itself, including how tokenized deposits and digital assets would fit with the principle of currency singularity.
The FCA is the UK regulator responsible for financial firms and markets, including consumer protection and market integrity. Yet the practical problem for crypto businesses is that several agencies are moving at once without a clearly unified endpoint. A short point matters here. Companies making decisions on product design, payments infrastructure, and expansion plans are left working around unclear rules.
Some firms are choosing jurisdictions with clearer rules
As the process drags on, major digital asset companies have started relocating to countries where legal guidance arrives faster. Fry pointed to derivatives platform Deribit, saying that if the UK had clearly stated that staking would not be treated as a collective investment scheme, the company might have moved there. In his view, that missed opportunity may have cost the government hundreds of millions of pounds in tax revenue after Coinbase acquired the platform.
Andrew MacKenzie, chief executive of sterling-backed stablecoin developer Agant, told CoinDesk that the direction of travel is positive, but the pace is still not enough. The comment is measured, but the message is clear. For firms in the sector, broad policy intent does not replace a usable timetable.
Bank of England caution is creating bottlenecks
A recent Financial Times report said the sector has grown frustrated with the Bank of England’s highly cautious posture. Companies want faster integration, yet restrictive stablecoin measures from the central bank have produced visible bottlenecks. The FCA, caught between political pressure and concerns tied to monetary policy, has continued to rely on controlled testing environments as its main channel for engagement.
Matthew Long, the FCA’s Director of Digital Assets and Payments, described the route ahead as a “comprehensive structure built step by step,” adding that applications are being accepted and firms are receiving support. Markets, though, are focused on when the rules will actually be in force. Under the current timeline, the new regulatory package is due to take effect in October 2027.
Dollar stablecoins may keep the upper hand before UK rules arrive
Experts cited in the report warned that if the UK does not adapt quickly enough to market conditions, dollar-based stablecoins with deeper liquidity are likely to strengthen their position. Without a competitive digital pound, private firms are likely to keep using US stablecoins in payment flows. Until the 2027 implementation date, uncertainty around compliance, payments infrastructure, and product planning is set to keep weighing on investment and innovation decisions.