Jack Paul 
London’s Fintech Success Threatened by Digital Asset Stagnation
London’s financial technology revolution seemed unstoppable just a few years ago. Companies like Monzo grew from nothing to serving over 13 million customers and generating more than $1 billion in annual revenue since 2017. But something’s changed recently. The numbers tell a worrying story – UK tech funding dropped 35% to £16.2 billion this year, and the London Stock Exchange saw 88 companies delist compared to just 18 new listings. Perhaps most concerning, Revolut, one of London’s most successful fintech companies, announced plans to move key operations to Paris.
These trends suggest London might be losing its position as Europe’s main financial innovation center. The common narrative says the UK is falling behind in digital assets while the US, Asia-Pacific region, and even the EU race ahead with clear regulatory frameworks. This view has some truth to it, but I think it might overlook that being first doesn’t always mean being best. There’s still time for London to catch up.
The Growing Cost of Regulatory Delay
The digital asset market reached over $4 trillion in September 2025, with some predictions suggesting it could hit $20 trillion by 2030. Major financial institutions like BlackRock and JP Morgan are increasingly treating digital assets as a legitimate asset class. Stablecoins alone have grown to a $300 billion market, with Citigroup forecasting they could reach $4 trillion by 2030.
What’s interesting is how these digital assets are starting to function like traditional financial infrastructure. They’re reducing transaction costs, speeding up settlement times, and improving margins across financial services. The UK benefited enormously from fintech – thousands of jobs created, billions in investment attracted, and London’s financial reputation strengthened. Digital assets could deliver similar economic benefits.
But the UK government seems uncertain how to handle this new technology. Reform UK appears to be the only major party with clear digital asset policies, while the current government aims to deliver a full framework by early 2026. This delay comes with real consequences.
Banking Challenges and Regulatory Confusion
Surveys from 2025 show that half of UK crypto and fintech companies were denied bank accounts or had existing accounts closed. Even more striking, 98% of crypto hedge funds faced unexplained banking rejections in 2024. This “debanking” problem contrasts sharply with the supportive environment that helped Monzo and Revolut succeed.
Meanwhile, other regions are moving faster. The US passed the GENIUS Act for stablecoin regulation earlier this year and is working on the CLARITY Act for market structure. The EU’s MiCA framework could bring €1.8 trillion to European markets, and Hong Kong’s licensing regime drove 85% market growth in Asia.
The UK has started responding with initiatives like the UK-US Transatlantic Taskforce for Markets of the Future, which aims to deliver regulatory recommendations by March 2026. This could help align standards between the two markets, but it also positions the UK as following rather than leading.
Even the Bank of England sends mixed messages. Governor Andrew Bailey initially warned that stablecoins threatened traditional banking, suggesting limits on how much people could hold. Then he reversed course, acknowledging that stablecoins could drive payment innovation and that banks and stablecoins might coexist. This change in thinking is welcome, but it comes without concrete policy changes and years after other regions embraced similar approaches.
Potential for Recovery Despite Current Challenges
There are reasons to think the UK could still succeed in digital assets. Gemini’s 2025 report shows UK crypto ownership jumped to 24%, growing faster than even the US. This grassroots adoption creates natural demand for better regulation.
Post-Brexit Britain has some advantages – it can create its own rules while staying close to European markets. The EU’s MiCA implementation has been difficult, with predictions that 75% of licensed firms might drop out due to compliance challenges. The UK could learn from these mistakes and offer a simpler alternative.
The UK’s regulatory tradition might actually help here. Rather than building entirely new frameworks from scratch, the UK can adapt existing financial services regulations to cover digital assets. This principles-based approach could be more flexible than prescriptive rule-making as technology evolves.
But the window for action is closing. Every month of delay means competitors capture more institutional investment, attract top talent, and build the infrastructure for tomorrow’s financial system. Revolut’s move to Paris might be just the beginning of a larger trend unless policies change quickly.
Britain built its financial reputation through innovation – from the world’s first ATM to pioneering fintech regulation. That tradition doesn’t have to end with traditional finance. Digital assets represent the next wave, and the potential economic returns in jobs, investment, and tax revenue justify taking some regulatory risks. With clear policies, the UK could still position London as the bridge between traditional finance and the digital future.