CoinDesk
Former FCA policymaker Isadora Arredondo, now Hedera's vice president of global policy, says Britain's struggle to become a global crypto hub stems less from regulatory hostility than from a widening gap between policy ambition and execution. In a London interview with CoinDesk, she described the divide as structural, not ideological.
Arredondo, who worked at the FCA between 2018 and 2021, argues the regulator has run two parallel tracks. On the wholesale side, the FCA launched the Digital Securities Sandbox and worked hands-on with financial institutions on tokenisation. For startups and retail-focused firms, however, the U.K. has largely tried to fit crypto activities into existing regulatory structures, producing long authorisation processes and repeated reviews from different teams, rather than a dedicated framework comparable to the EU's Markets in Crypto Assets (MiCA) regime.
She traces the slowdown to events that consumed the FCA's bandwidth after Brexit and the COVID-19 crisis, followed by high-profile retail-investment failures such as London Capital & Finance and the Woodford Fund, which pushed the regulator toward a stronger consumer-protection stance under CEO Nikhil Rathi.
Why it matters
The execution gap is now shaping market structure. The Bank of England's recent pivot on stablecoin rules, replacing a proposed cap on individual stablecoin holdings with a 40 billion pound (around $50.6 billion) temporary issuance guardrail on systemic stablecoins, is the clearest signal yet that the U.K. is still designing its perimeter in flight. U.K. regulations covering the broader crypto regime are set to come into effect in October 2027.
Arredondo is also pushing beyond the U.K. debate. She argues the next phase of digital money will hinge on interoperability and common standards across blockchains, stablecoins and central bank digital currencies, pointing to the EU as a jurisdiction attempting to accommodate stablecoins, tokenised bank deposits and central bank money under one broad framework.
Frequently asked questions
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Who is Isadora Arredondo and why does her view on UK crypto policy matter?
Arredondo is a former FCA policymaker who worked on Brexit-era rulemaking and crypto regulation between 2018 and 2021, and is now vice president of global policy at Hedera. Her insider view carries weight because she has worked on both the policy design and execution sides of UK financial regulation.
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Why has the UK fallen behind on its crypto hub ambitions, according to Arredondo?
She argues the slowdown comes from a divide between policy ambition and execution, with the FCA's bandwidth absorbed by Brexit, COVID-19 and retail-investment failures like London Capital & Finance and the Woodford Fund. The result is a consumer-protection-first stance rather than a dedicated crypto framework like the…
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How does the FCA treat institutional crypto firms versus startups?
On the wholesale side, the FCA has launched projects such as the Digital Securities Sandbox and worked hands-on with financial institutions on tokenisation. Startups and retail-focused firms, by contrast, must navigate legacy authorisation processes and repeated reviews from different FCA teams, which can stretch…
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What did the Bank of England recently change on stablecoins?
The BOE rolled back an earlier proposal to cap limits on fiat-pegged stablecoins held by individuals and businesses. Instead, it introduced a macro-level temporary issuance guardrail capping total circulation of any single systemic stablecoin at 40 billion pounds, around $50.6 billion.
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When do the UK's broader crypto regulations come into effect?
According to the report, UK crypto regulations are set to come into effect in October 2027. Until then, firms will continue operating under existing rules adapted to crypto activity rather than a bespoke framework.
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