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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is chair of Marshall Wace, a multi-asset manager
The Financial Conduct Authority is currently consulting, with a near 250-page document, on the role and potential of stablecoins. I am tempted to put in a two-word response: “Too late.”
Japan introduced a Stablecoin Law in 2022, Singapore in 2023, Abu Dhabi in 2024 and the US in 2025. Britain has just entered a “consultation process”. Countries such as Singapore and Abu Dhabi, in particular, have good governments that understand the importance of regulation — smart, simple and fast — in attracting new industries and fostering innovation.
Smart regulation doesn’t cost anything. Unlike other government initiatives it does not require vast amounts of taxpayer funding to subsidise foreign investment. Rather the contrary.
Post-Brexit, when the City of London was under pressure to maintain its status as a leading financial centre, there was one very big and obvious opportunity, which was to establish itself as a (or the) leading centre for blockchain and crypto. Rishi Sunak, with his background in finance, understood this, but he had rather a lot on his plate as prime minister and there was apparently no one around him to drive it forward. So not much happened.
Now, in 2025, US Congress has just passed the Genius Act and the US stock market is excited about the potential of the blockchain and of stablecoin as the primary unit of account for many of the use cases. Circle, the issuer of the USDC stablecoin, has risen more than fivefold since it came to market last month, giving it a market capitalisation of more than $50bn.
Marshall Wace is a significant shareholder in Circle and in 2021 we arranged a dinner between Circle’s chief executive Jeremy Allaire and two senior members of the UK regulatory establishment. Over dinner, Allaire made a powerful case for stablecoin as a driver of new financial technologies and innovation. On the way out, one of the senior UK officials was heard to dismiss our American friends as a “bunch of libertarians”.
Few anecdotes could better epitomise the dismal state of UK regulation. While other countries, such as Abu Dhabi and Singapore, understand the implications of global competition for investment, and the importance of smart, rapid and light-touch regulation, Britain is trapped by a bureaucracy that overestimates risk and underestimates opportunity.
We have a government whose strategy for growth is more state spending and higher taxation. Despite the warm words from Rachel Reeves about risk-taking in her Mansion House speech, the chancellor is rooted in the rhetoric of “stability” and surrounded by a vast bureaucracy with no understanding of what is needed to create a dynamic, innovative economy.
Scott Bessent, her opposite number in the US, is an investor with decades of experience in financial markets. He understands what is needed to drive economic growth — cheap energy, free markets, low taxation and innovation. Bessent has described digital assets as “one of the most important phenomena in the world right now”. He understands that stablecoin will be the main unit of account of the blockchain and that blockchain is set to re-engineer the financial services industry. He also sees stablecoin as a way to “reinforce dollar supremacy” as users of stablecoin park their cash in Treasury bills and thus become a major holder of dollar reserves.
The passing of the Genius Act in the US will mark a philosophical turning point. In the battle for digital currency models, China and the EU notably prefer the central bank-controlled model. One feature of central bank digital currencies is that they give the ability to states to use money to exert more control on citizens. The stablecoin model, on the other hand, is out of the control of bureaucrats as the coin is issued by independent mints direct to citizens. We are set to see two models emerge, one statist and bureaucratic, the other libertarian and dynamic.
So in a way, the UK official was right. Britain has a choice to make on digital currencies. We can either opt for stablecoin, the model suited to a dynamic, innovative economy. Or we can go with the bureaucratic, statist solution. I am not holding my breath. A decision will probably take another three years, by which time most of our competitors will have left us in the dust.
In the meantime, I have a better solution. Rather than engage in yet more consultation, the chancellor should send our top regulatory teams to Abu Dhabi and Singapore on secondment. After a few months they might begin to understand what smart regulation looks like.
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