Former Chancellor Warns UK Is Falling Behind in Global Crypto Race

Highlights:

• Osborne warns the UK is falling behind in the crypto race and needs urgent action to remain globally competitive.
• FCA will allow retail investors to buy crypto ETNs from October 8, ending a three-year ban on the products.
• Bank of England rules make stablecoins unappealing and keep the UK out of the growing global stablecoin market.

Former Chancellor George Osborne has warned that the UK risks falling behind in the global crypto race. In an opinion piece for the Financial Times, he said the country’s slow action could make it irrelevant in the financial future. Osborne pointed to faster progress in regions like the US, Singapore, Hong Kong, and the EU.

Former UK Chancellor George Osborne has criticized the Labour government's cautious stance on crypto, warning that Britain is falling behind the US, EU, and Asia. He likened the current crypto shift to the 1980s “Big Bang” financial reforms, urging swift action to avoid missing a…

— Wu Blockchain (@WuBlockchain) August 4, 2025

He compared the current moment to the Big Bang reforms of the 1980s, which turned London into a financial powerhouse. Osborne served as Chancellor from 2010 to 2016 and has supported fintech innovation throughout his career. Now on Coinbase’s global advisory council, he continues to push for stronger policy on digital assets.

Osborne criticized both Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey for delays in setting clear crypto policies. While Reeves claimed she wants to make the UK “the best place to innovate,” Osborne called the statement vague. He said political leaders must pass clear laws instead of shifting blame to regulators.

He also highlighted how other governments, including the US, have taken strong steps. Politicians in Washington now include crypto in their policy platforms. Osborne said the UK must act now if it hopes to compete with these international efforts.

Bank of England’s Position on Stablecoins Sparks Debate

Bank of England Governor Andrew Bailey recently repeated the bank’s firm stance on stablecoins. He said any pound-based stablecoin must be fully backed by central bank deposits. These funds do not earn interest, making stablecoin models harder to maintain.

Bailey delivered his comments during the Mansion House dinner. He emphasized that financial stability remains the Bank’s top concern. Bailey has cautioned that the introduction of limited returns to reserves could be highly volatile and a risk to the monetary system.

Critics believe that these regulations inhibit the development of the stablecoin market in the UK. Currently, dollar-pegged stablecoins control 99% of the global $250 billion market. The UK has no major stablecoin presence under current rules. Osborne pointed to this gap as another example of the country falling behind.

In a notable shift, the Financial Conduct Authority will allow retail investors to access crypto exchange-traded notes again. This change ends a ban that lasted over three years. Starting October 8, individuals can buy CETNs. The FCA had banned these products in January 2021 due to concerns about volatility and investor risk.

UK regulators to allow individual investors to invest in cryptocurrency ETNs starting in October

New regulations allowing individual investors in the UK to invest in cryptocurrency exchange-traded notes (cETNs) will take effect on October 8. Under this measure, individual… pic.twitter.com/S1PrR6yJaM

— bitboard (@bitboardtop) August 4, 2025

Domestic Policy Moves Signal Slow Progress in Global Crypto Race

Although changes are underway, many say progress remains too slow. The UK has not implemented a consolidated legal framework with regard to digital assets. Meanwhile, the EU introduced its MiCA regulation, and US legislators are still developing their own crypto laws.

UK authorities recommended prohibiting the use of credit cards or any borrowed capital by retailers to purchase crypto in May. Rachel Reeves said the UK plans to partner with the US on fintech policy in April. A Treasury spokesperson said new rules would help boost investor trust. Yet Osborne argued that real progress needs strong laws from Parliament, not vague promises.