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Your support makes all the difference.<\/strong>Read more<\/p>\n When it comes to cryptocurrencies<\/a>, Britain\u2019s on the slow train to nowhere. That, at least, is the view of former chancellor George Osborne<\/a>, and despite being a moderate crypto sceptic myself, I\u2019m beginning to think he might have a point.<\/p>\n Writing in the Financial Times, Osborne tells the story of how he used Britain\u2019s first crypto ATM<\/a>, handing the \u201ccoin\u201d he withdrew to the Treasury. All right and proper. But financially, not so smart. The Bitcoin<\/a> he withdrew is now worth 200 times what it was then.<\/p>\n All of his successors have subsequently made the same promises he made: to put Britain at the centre of the financial revolution that was then just getting underway. But their bombastic talk of making the nation \u201ca leader\u201d wasn\u2019t backed by any meaningful action. In the absence of political direction, regulators got scared, putting up restrictions designed to protect \u2013 for which read nanny \u2013 retail investors, while stymieing the wholesale market\u2019s development.<\/p>\n Now phase two is upon us \u2013 stablecoins<\/a> \u2013 and it looks like Britain is again going to miss the boat. Stablecoins are much more interesting to me than Bitcoin and its chums, because their value is linked to an underlying asset. Take a guess what that asset is in the vast majority of cases. If you said \u201cthe dollar\u201d, give yourself a gold star. Or a gold stablecoin. America\u2019s openness to this stuff \u2013 which Donald Trump<\/a> put into overdrive \u2013 has put it at the head of the pack.<\/p>\n Warren Buffett<\/a>, the legendary \u201cSage of Omaha\u201d who has forgotten more about investment than most asset managers will ever learn, once said: \u201cIf you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn\u2019t take it \u2013 because what would I do with it? I\u2019d have to sell it back to you one way or another. It isn\u2019t going to do anything.\u201d<\/p>\n However, what sustains crypto is the power of the idea underpinning it during an epoch in which ideas have unusual power. Unless every holder loses faith all at once \u2013 and they won\u2019t \u2013 it will continue to have value as a tradable commodity. Even Berkshire Hathaway has taken a sip of what Buffett likened to \u201crat poison squared\u201d<\/a> by investing in Nu Holdings, a Brazilian digital banking company with its own crypto platform.<\/p>\n In Britain, however, regulators have wrinkled their noses, grabbed our hands and dragged us off. \u201cRachel Reeves<\/a> rightly says we\u2019ve all become too risk-averse,\u201d Osborne writes. \u201cWe became the world\u2019s financial centre because we weren\u2019t afraid of change. On crypto and stablecoins, as on too many other things, the hard truth is this: we\u2019re being completely left behind. It\u2019s time to catch up.\u201d<\/p>\n The Treasury\u2019s response can best be summarised as \u201cbut, but, but, we\u2019re doing stuff\u201d, while looking all hurt at Osborne\u2019s criticism. But he\u2019s right.<\/p>\n If you live in New York or Nebraska, you can buy an exchange-traded fund (a type of collective investment vehicle) issued by, say, BlackRock, a giant asset manager. If you live in Newcastle, you can\u2019t. Consumer \u201cprotection\u201d rules mean you have a 24-hour wait before being allowed to buy Bitcoin<\/a>; in the US, you\u2019re good to go. British crypto bros can still get in \u2013 but only after they and their mates run the regulatory gamut first. No wonder they take their business overseas.<\/p>\n Here\u2019s the thing: crypto is going to cause a scandal. You can see it coming a mile off. It\u2019s new(ish), it\u2019s volatile, and the crypto kids have a habit of getting over-excited while forgetting what they were taught about Newtonian physics in school. What goes up must come down. Tick, tick, tick: boom.<\/p>\n The end result will be messy and people are going to lose a lot of money. They\u2019re going to cry about it. The BBC will trot out interviewers who will look all concerned and sympathetic while the losers moan and demand that someone pay compensation.<\/p>\n This helps to explain why people like Andrew Bailey<\/a>, the governor of the Bank of England \u2013 who won\u2019t even countenance a digital pound<\/a> \u2013 want to stay out of the water when the rest of the world is jumping into online pools of digital cash.<\/p>\n This means any chance of shaping this emerging market will be lost, and London will continue to decline as a financial centre in the process \u2013 becoming more and more irrelevant as time goes on. Scandals happen. They\u2019re endemic to the City, to Wall Street and the rest. When they do, you pick yourself up, sort out the mess, try to learn the right lessons, and move on. It\u2019s the cost of doing business.<\/p>\n