UK right now: ‘Crypto regulation superhighway with only a few small vehicles in the slow lane’

The UK Government must work with private sector crypto companies, rather than simply regulate them, if Britain is to fulfil its potential as a stablecoin trading superpower, a leading research firm based in Birmingham warned today.

Olusegun Aborode, head of the research team at Dune UK, the crypto data analytics firm, said that while he welcomed the government’s vision of a “crypto regulation superhighway,” there were currently “only a few small vehicles moving on it and only in the slow lane.”

UK lagging behind the US

According to Dune UK research, the UK private sector is lagging behind the US in the adoption of regulated GBP-backed stablecoins.

Olusegun, from Birmingham, said: “The UK has articulated a bold and credible vision for a future in which digital currencies are a safe and integral part of its financial landscape. However, the on-chain data shows that the private sector has not yet delivered a product that can fulfil this vision.

“We have a vision of crypto regulation superhighway, but right now only a few small vehicles are moving on it, and those are only in the slow lane. The US is far ahead of us and we must catch up.”

Chancellor Rachel Reeves said this month that her aim, alongside the Bank of England (BoE) and the Financial Conduct Authority (FCA), is to bring in “firm and proportionate regulation” for crypto from 2027.

‘Digital securities sandbox’ until 2029

To road test how the UK’s emerging crypto industry can operate under the developing regulatory framework, the BoE is running a “digital securities sandbox” until 2029. 

This includes the stablecoin market, which currently accounts for only about £40m and around £4m to £5m of trade on decentralised exchanges, according to Dune UK research. The US, by contrast, has billions of dollars in USD-pegged stablecoin in circulation.

Olowoporoku Adeniyi, a key contributor to the research and CEO of Ezyswap, echoed the call for immediate action. 

“The UK is at a defining moment in the global stablecoin race,” said Leeds-based Adeniyi. 

“Regulation alone is not enough; it must be paired with real-world utility and deep integration into payment rails, remittance corridors and DeFi (decentralised finance) liquidity pools.

“The data reveals a critical gap between policy ambition and execution. The UK has the regulatory framework and the talent. What it needs now is empowerment for domestic crypto firms to build, test and scale compliant stablecoin infrastructure. If we act decisively, the UK can establish itself as a global hub rather than a spectator in this space. But this window of opportunity will not remain open indefinitely.”

‘The opportunity is immense’

Olusegun added: “The integration challenge is key to the future of stablecoins in the UK. The opportunity is immense. The first GBP stablecoin issuer to successfully navigate this challenge – by embracing regulation, building deep liquidity and breaking into the core of the DeFi ecosystem – will not only capture a significant market but will validate the UK’s entire regulatory approach.”

He said UK stablecoin issuers must work with the government and regulators to: 

• Embrace regulation as a competitive advantage: By being among the first to achieve full compliance with the BoE and FCA regime, an issuer can market itself as trustworthy and safe.

• Build institutional-grade liquidity: The next step is to move beyond niche DEX (decentralised exchange) trading. 
• Forge a path into DeFi: The ultimate goal must be integration into DeFi money markets. 
• Strategic partnerships: Working directly with the governance bodies of major DeFi protocols to make the case for listing their asset, using their regulated status as a key selling point.
• Demonstrating demand: Building a strong use case outside of DeFi – eg, in real-world payments or remittances to demonstrate organic demand for borrowing the asset.