‘UK can do better’: Kraken urges regulators to move faster on stablecoin and tokenization rules

At Zebu Live in London on Tuesday, Kraken UK Managing Director Bivu Das said the country remains one of the exchange’s largest markets globally, with about one in five UK adults now owning crypto, but warned that regulators need to “move faster” to ensure the UK does not fall behind other jurisdictions.

Das described the UK’s consultative, outcome-based approach as the right one, but urged policymakers not to restrict innovation in areas such as tokenized assets and stablecoins — and to allow new products to be tested in the market more quickly.

Citing Kraken’s rollout of xStocks support in the EU earlier this year — a product not yet available in the UK — Das said the tokenized assets are already attracting millions in daily net inflows and opening access to previously restricted capital markets, describing them as a stepping stone for investors to something that could be “super interesting.”

While natively issued tokenized equities may emerge over time, Das questioned whether most investors value voting rights enough to justify greater complexity, noting that wrapped versions like xStocks already provide the simple exposure many want.

Das acknowledged the Financial Conduct Authority’s openness to dialogue but said the Bank of England has been less open to experimentation, highlighting its proposed cap on how much stablecoin exposure businesses can hold — a move some view as an effective ban.

Light at the end of the tunnel

Das said Kraken also continues to engage regularly with UK government departments and political parties to promote education and policy understanding around digital assets. He said interest in crypto regulation rose briefly under the previous Conservative government before stalling after the snap election in 2024, with that process having to start again under the new Labour government.

However, the UK does now have a clearer path toward comprehensive crypto regulation — the kind the industry has been requesting for years, Das said, covering the “nuts and bolts” of market infrastructure such as custody, trading structures, and cross-border liquidity, which are essential to a global industry but often sit outside the traditional focus of domestic regulators.

“But we need to move faster, and we need to be brave on the things that we know will make a difference,” he said. “Maybe there’s light at the end of the tunnel to do this relatively quickly.”

UK market remains Kraken’s second-largest

While the lack of clarity on areas such as tokenized stocks means such products remain unavailable to UK customers for now, Kraken is still expanding its product range in a country that remains its second-largest market outside of the U.S.

“I think some stats will say 20% of adults own some sort of crypto in the UK, which is one in five. It’s pretty significant,” Das said, despite frictions added from recent financial promotion rules in the country. Kraken’s plan is to open up new channels beyond traditional trading to let users interact with crypto in ways that suit their experience and comfort level.

This includes a recently revamped consumer app and a new neo-bank challenger service called Krak, which will include a debit card for UK and European users and more bank-like features such as the ability to receive salaries, make cross-border payments, and earn stablecoin yields.

On the state of the crypto market following the historic liquidation event and crash of Oct. 10, Das described the current environment as more mature and resilient than in previous cycles, pointing to institutional stability despite the recent volatility.

“If you had the same thing five years ago, you’ve seen the failure of a number of institutions,” he said. “So, I think the longevity and the sustainability and strength of the market is a bit more noticeable than it has been historically.”