Main Points:
- Growth-Focused Regulatory Framework: Advocating rules that balance innovation and consumer protection
- Leadership in Global Standards: Steering international policy for crypto and blockchain adoption
- Formal Adoption of Overseas Stablecoins: Allowing USDT, USDC, and others to circulate freely in the UK
- Removal of Legal and Tax Barriers: Clearing the path for tokenization of assets
- Recent Developments: FSMA draft legislation, FCA roadmap, and draft SI published on 29 April 2025
- Ripple’s Institutional Bet: $1.25 billion acquisition of prime broker Hidden Road
- Stablecoin Market Dynamics: Tether dominates with ~65% share; USDC holds ~20%
- UK–US Collaboration: Exemption for overseas stablecoin issuers aligns with U.S. legislative trends
1. Growth-Focused Regulatory Framework
Ripple’s first pillar calls for a regulatory structure that prioritizes market growth without compromising security. In London on 21 June 2025, Cathy Craddock, Ripple’s Managing Director for UK and Europe, emphasized the need for rules tailored to foster innovation, reduce entry costs for startups, and protect retail investors.
This mirrors the draft Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, published by HM Treasury on 29 April 2025. The draft SI classifies “qualifying cryptoassets” and “qualifying stablecoins” as specified investments under FSMA, extending the FCA’s regulatory perimeter to digital assets. Consultation papers CP25/14 and CP25/15 further outline rules on stablecoin issuance, custody, and prudential requirements for crypto firms.
By applying established financial services regulations—such as operational resilience standards and capital requirements—the UK aims to avoid the pitfalls of overly restrictive regimes, thus achieving a balance between innovation momentum and market integrity.
2. Leadership in Global Standards
The second pillar urges the UK to take a vanguard role in shaping international crypto standards. Post-Brexit, the UK is no longer bound by the EU’s MiCA (Markets in Crypto-Assets) framework, creating an opportunity to lead rather than follow. Ripple’s summit appeal underscored that crafting interoperable rules with the U.S. and major Asian markets will amplify London’s influence in global crypto policy.
Indeed, Chancellor Rachel Reeves has held high-level discussions with U.S. Treasury Secretary Scott Bessent on cross-border regulatory sandboxes and digital securities collaboration. Such initiatives could position the UK alongside the U.S. as a dual hub for innovation and compliance, potentially exporting best practices to emerging markets.
3. Formal Adoption of Overseas Stablecoins
Unlike the EU’s MiCA, which restricts stablecoin circulation to assets issued within member states, Ripple’s third pillar advocates for the formal acceptance of major overseas stablecoins—namely Tether (USDT) and USD Coin (USDC).
The UK government’s draft regime exempts non-UK stablecoin issuers from domestic licensing requirements, allowing British investors to use USDT, USDC, and others without local registration. This approach aligns with anticipated U.S. legislation aimed at legitimizing dollar-backed stablecoins. By embracing established issuers from North America, the UK could re-create an offshore liquidity pool reminiscent of the historical Eurodollar market, enhancing transaction velocity and capital availability for innovators.
Chart: Most Adopted Stablecoins in 2025
This data illustrates the dominance of U.S.-issued stablecoins, with USDT accounting for roughly 65% of global stablecoin transactions and USDC holding about 20%. Given the strong uptake of USDC in the UK market—as noted in global adoption reports—officially welcoming these assets could accelerate crypto payments, DeFi integration, and cross-border settlements in the City of London.
4. Removal of Legal and Tax Barriers
Ripple’s final pillar focuses on dismantling legal and tax impediments to asset tokenization. Current UK laws often treat tokenized assets ambiguously, leading to legal uncertainty and tax inefficiencies. The draft legislation paves the way for “qualifying cryptoassets” to operate under clear definitions, but further work is needed to streamline securities laws, clarify VAT treatment on token transfers, and provide legal safe harbors for security token offerings (STOs).
Policymakers are exploring amendments to the Financial Collateral Arrangements Regulations to recognize tokenized collateral and reducing stamp duty for digital transfers, which would encourage the migration of real-world assets—such as real estate, art, and private equity—onto blockchain platforms.
5. FSMA Draft Legislation and FCA Roadmap
On 29 April 2025, HM Treasury released its near-final draft of the FSMA Order 2025, marking a watershed moment in UK crypto regulation. The accompanying policy note and FCA discussion papers signify momentum toward a comprehensive regime. The legislation is slated for final parliamentary approval by end-2025, with the FCA poised to implement the regime in phases: stablecoin consultation closed on 13 June 2025, while broader crypto custody and market abuse rules will follow later in the year.
6. Ripple’s Institutional Bet: Hidden Road Acquisition
Ripple has demonstrated its commitment to the UK market through strategic acquisitions. In April 2025, Ripple agreed to purchase London-based prime broker Hidden Road for $1.25 billion, one of the largest deals in the digital assets space. This move gives Ripple first-mover advantage as a crypto company operating a global, multi-asset prime brokerage network.
Hidden Road, already licensed by FINRA as a U.S. broker-dealer, brings institutional-grade services—clearing, financing, and prime brokerage—to Ripple’s ecosystem. Integration with the XRP Ledger is expected to reduce settlement times from 24 hours to 3–5 seconds, supporting daily volumes in excess of $10 billion. This institutional anchor underscores London’s appeal as a hub for hybrid TradFi–DeFi services.
7. Market Trends: Stablecoin Adoption and Liquidity
Stablecoins have seen rapid global growth, with total supply surging 28% year-over-year and transfer volumes reaching $27.6 trillion in 2024—exceeding Visa and Mastercard combined. Corporate adoption is rising, particularly in jurisdictions seeking USD liquidity alternatives. While Tether remains dominant, USDC’s market share has grown, especially in developed economies like the UK, Singapore, and the U.S.
Experts project that lifting restrictions on overseas stablecoins in the UK will boost remittance corridors, enable programmable payments, and support tokenized yield products. Combined with Ripple’s institutional infrastructure, the UK could see a virtuous cycle of liquidity, innovation, and regulatory clarity.
8. UK–US Collaboration and the Competitive Landscape
By exempting foreign issuers from registration, the UK aligns with emerging U.S. legislation, which similarly aims to avoid burdening overseas stablecoin providers with domestic licensing. Discussions between Chancellor Reeves and U.S. counterparts envisage a transatlantic sandbox for digital securities, potentially harmonizing rules across two of the world’s largest financial markets.
This liberal stance contrasts with the EU’s MiCA regime, which some critics argue may stifle cross-border innovation by limiting assets to EU-based issuance. Should the UK–U.S. alliance solidify, London could entrench its position as a gateway for global digital asset issuance and trading.
Conclusion
The UK stands at a pivotal crossroads in its quest to become a leading crypto jurisdiction. Ripple’s four-pronged strategy—growth-focused regulation, global standard-setting, formal acceptance of overseas stablecoins, and removal of tokenization barriers—offers a coherent roadmap. Complemented by HM Treasury’s draft FSMA Order 2025, the FCA’s consultation roadmap, and Ripple’s institutional push via the Hidden Road acquisition, the conditions are ripe for London to bridge TradFi and DeFi at scale.
By embracing established stablecoin providers, fostering regulatory cooperation with the U.S., and clarifying legal and tax frameworks for tokenized assets, the UK can catalyze a new era of blockchain-powered services. For investors, developers, and enterprises seeking the next frontier in crypto innovation, the UK’s evolving ecosystem presents fertile ground for growth, liquidity, and global influence.
