George Osborne Warns UK Losing Crypto Edge to U.S. Policies

George Osborne, the former UK chancellor and current adviser to Coinbase, has sounded the alarm over the United Kingdom’s diminishing influence in the global crypto landscape, particularly in the stablecoin sector. In a Financial Times op-ed, Osborne argued that the UK is failing to capitalize on its historical financial leadership and risks falling behind as the U.S. advances through initiatives like the GENIUS Act [1]. He emphasized that without urgent regulatory clarity and proactive policy, the British pound—one of the world’s most traded currencies—could be sidelined in the digital economy [2].

Osborne criticized current Chancellor Rachel Reeves for failing to deliver on commitments to support crypto innovation. His concerns were underscored by Coinbase’s recent “Everything Is Fine” ad campaign, a satirical musical piece that mocks the UK’s economic stagnation and cost-of-living crisis while promoting crypto as an alternative. Though the ad was reportedly banned by UK TV networks, it sparked public debate and highlighted Coinbase’s strategic efforts to shape policy in Britain [3].

The U.S., meanwhile, is making strides with the GENIUS Act, which aims to establish a framework for stablecoin regulation. However, the legislation has drawn scrutiny for a controversial clause that prohibits yield-bearing stablecoins. Critics argue that this restriction benefits traditional banks, which have long controlled yield generation for depositors. The move has led to speculation that tokenized money market funds may gain traction as an alternative, offering similar functionalities with regulatory oversight [4].

Temujin Louie, CEO of Wanchain, warned that the ban on yield-bearing stablecoins could give tokenized money market funds an edge, particularly as they gain speed and flexibility. JPMorgan strategist Teresa Ho noted the potential for these funds to serve as margin collateral and fulfill other use cases previously dominated by stablecoins. However, Paul Brody of EY cautioned that stablecoins retain a key advantage in DeFi due to their bearer asset nature, enabling seamless integration across decentralized platforms [5].

The influence of traditional banking over crypto legislation has also raised concerns. Financial institutions were actively lobbying against yield-bearing stablecoins, viewing them as a threat to their business models. NYU professor Austin Campbell explained that banks, which have historically offered minimal interest, fear competition if stablecoins can directly offer yields to consumers. Despite the restrictions, the U.S. market is not devoid of yield-bearing digital assets; in February, the SEC approved the first yield-bearing stablecoin security, YLDS, issued by Figure Markets with a 3.85% yield [6].

Osborne’s critique and Coinbase’s aggressive lobbying efforts signal a growing push to reshape the UK’s crypto regulatory environment. With the U.S. forging ahead and the UK lagging, the stakes are high for a country that once led in financial innovation. The question now is whether policymakers will act swiftly to reclaim the UK’s position or watch it slip into irrelevance in the digital age.

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Sources:

[1] [George Osborne Warns UK Is Losing Crypto Edge](https://coinpaper.com/10344/george-osborne-warns-uk-is-losing-crypto-edge)