Another week; another publication. On Tuesday, we released A Sterling Opportunity, which makes the case for the UK to implement a pro-innovation regulatory regime for stablecoins, bringing benefits to entrepreneurs, consumers and the government.
For the uninitiated, I’ll hand over to the authors, Hugo Okada and Osian Guthrie, to explain what stablecoins are:
“Stablecoins are, at their core, remarkably simple. The most widely used versions are fiat-backed stablecoins, which are digital tokens representing existing currencies and backed one-for-one by safe reserve assets such as cash or short-term government bonds. If a user holds a dollar or sterling stablecoin, they are effectively holding a digital claim on reserves held by the issuer. Stability comes from the promise that the token can be redeemed for the underlying currency at par.”
As the paper argues, and as Hugo and Osian set out in a CapX article, stablecoins enable near-instant, low-cost international payments around the clock, bypassing the delays and expense that plague traditional banking. They also support programmable finance, allowing payments to be embedded into software and automated contracts. Furthermore, stablecoins can boost financial inclusion by giving people in volatile economies access to stable currencies. And for governments, because stablecoins are typically backed by sovereign debt, their growing adoption increases demand for government bonds — which in the case of sterling-denominated stablecoins could help lower borrowing costs, as well as reinforcing London’s position as a global financial centre.
The paper argues that we should avoid overly prescriptive regulation that risks stifling stablecoin innovation before the market has had a chance to develop. We’re particularly concerned by three current proposals: universal redemption obligations, which misunderstand how stablecoins actually circulate on secondary markets; stringent capital requirements, which could shut out the smaller innovators who have historically driven progress in digital finance; and paltry holding caps, which would undermine some of the most valuable stablecoin use cases, including large-scale B2B payments and corporate treasury management.
Instead, we advocate for principles-based regulation focused on transparency, solid reserve backing, and robust custody arrangements — giving the technology and market room to evolve while maintaining credible oversight.
If this is still feeling a bit esoteric, it won’t for long. The total market capitalisation of stablecoins now stands at around $300 billion, with projections of this hitting between $1.9 trillion and $4 trillion by 2030. Lord Holmes of Richmond MBE wrote the foreword, and as former Chancellor George Osborne argued last year in the Financial Times:
“We became the world’s financial centre because we weren’t afraid of change. On crypto and stablecoins, as on too many other things, the hard truth is this: we’re being completely left behind. It’s time to catch up.”
The report was fed into the Financial Services Regulation Committee’s stablecoin inquiry.
Copyright and Wrongs
In our latest UK AI Fieldbook interview, Mann Virdee caught up with Hanna Celina, founder of Kinnu, a London-based educational technology startup with over 1 million users.
The challenges of the UK’s copyright regime feature prominently in the chat, with Hanna describing the UK’s current position as “wilfully shooting itself in the foot.” She argues:
“If you look at British copyright laws, you realise you really cannot do anything. It’s insane how high the level of protection is for copyright holders compared to the US, where companies have the freedom to innovate faster.”
“It goes deeper. We could be making strides in supporting A Levels or IB [International Baccalaureate], but the exam scores and question banks are just not public, even though they are often government-set exams. And if you look at learning standards — what a learner should know for a GCSE — it’s a bunch of poorly formatted Word docs that are completely not LLM-friendly. It was impossible to build a consistent ‘National Knowledge Graph’ from this data the last time we looked at it, which would be like a digital map where every concept is linked to its prerequisites and its real-world applications. That would enable a learner to zoom in and out of topics and understand how concepts relate to other disciplines. But, with recent AI improvements, turning that kind of data into a National Knowledge Graph might just be possible now.”
The interview covers a lot more besides, including how Kinnu uses A/B testing to validate learning interventions at scale; the human-in-the-loop requirement for zero-error tolerance in legal and financial education; how vibe coding is turning writers into product builders; and why Hanna thinks R&D tax credits are better than government grants for agile startups.
Opportunity Knocks
Does your business focus on defence technologies and robotics? If so, you can use the Front Door pilot to tell the Regulatory Innovation Office (RIO) about any regulatory barriers you have.
The Front Door is an experimental, business-led pilot by the RIO to collect and address regulatory challenges. It aims to make it easier for businesses to highlight barriers, helping RIO target reforms where they are most needed and to support innovation and growth.
The trial closes in a week. Share your experience here.
Message from our Partner
Join us for an exclusive deep dive into the sale of Cadcorp, a leading geospatial software provider, to NEC Software.
In this live panel discussion, the sellers of Cadcorp will join our Head of Corporate Finance, Matt Katz, to take you behind the scenes of their journey, from shaping a growth story in a specialist market, to navigating strategic conversations with a global buyer, to completing a deal that secured the next chapter for their team, product, and customers.
When? Tuesday, 24 March 2026, 8.30am to 11am
Where? Buzzacott offices, 130 Wood Street, London, EC2V 6DL