Lisa Gordon, Cavendish Investment Bank chair, suggests the UK government should impose taxes on crypto to boost the economy. Gordon is astounded that over half of the population’s younger citizens own crypto but not equities. Gordon believes that a crypto tax will redirect funds to local stocks and positively impact the economy.
Gordon suggests that the UK government reduce taxes on stocks while introducing taxes on crypto as a way to redirect funds from unproductive assets to productive forms of capital. She reasons that companies produce jobs and that further stock investment could boost employment.
She wants to encourage people to invest their money in shares and not spend too much on cryptocurrency. Gordon claims that crypto does not feed back into the economy and laments that over half of Brits under 45 have crypto holdings but no equity. Gordon wishes that the stock stamp duty tax be removed and replaced with a crypto tax.
According to Gordon, cryptocurrencies are nonproductive assets that do not contribute to economic growth compared to productive assets such as shares that provide capital, employ people, pay tax, and innovate. However, entire countries, such as America and El Salvador, embrace Bitcoin and insist that digital assets have tangible benefits for the economy.
The London Stock Exchange has seen many companies drop out of the market, corresponding with a decline in IPOs and a general lack of confidence in U.K. equities. Working with the Capital Markets Taskforce, Gordon wishes to address this problem by taking immediate action to revitalize the domestic market. One of her proposals is to reallocate pension funds into unlisted companies, releasing up to £100 billion in capital.
U.K. investors, however, continue to embrace cryptocurrencies, seeing the innovative technology as a way to hedge against inflation and secure funds in the event of a bank run. Online exchanges have fuelled the popularity of crypto, offering accessible platforms that appeal to younger people. The U.K. Financial Conduct Authority (FCA) estimates that over 2 million people have traded crypto in the past year.
According to Chainalysis, the U.K. jumped from 14th place in 2023 to 12th place in 2024 regarding crypto adoption, and this was happening when the FCA was heavily scrutinising digital assets. Bivu Das, the U.K. manager of Kraken, believes that the U.K. is on the brink of mass crypto adoption.
EY, a consulting firm, found that the London Stock Exchange had its quietest year on record, with 18 companies listing in 2024, as compared to 23 companies listed in 2023, and 88 companies delisting from the exchange in 2024. Companies have stated the reason for their move, saying lower liquidity and valuations have forced them out of the market.
Gordon believes that Trump has lost trillions of dollars in the American market through his tariffs and subsequent global supply chain disruption. She believes that the U.K. is a safe haven from such a threat and could potentially become a trading hub once again.
