The UK is thinking about a big financial move: putting a tax on buying cryptocurrencies to get people to invest in UK stocks. Money experts are worried that traditional markets are being ignored because more and more young Britons are choosing crypto over stocks. Lisa Gordon, chair of the investment bank Cavendish, worries about this change and says that the UK’s economy could suffer from a lack of stock investments. One idea for a solution is to lower stamp duty on stocks while keeping it on cryptocurrency trades. This would help bring money to UK-based businesses.
Cryptodominance and Falling Equity Investments
Financial experts are worried about the rise in the use of cryptocurrencies among Britons under 45. Gordon pointed out that more than half of people under 45 own crypto but no stocks, which is a trend she finds stressful. The Financial Conduct Authority (FCA) said that about 7 million adults in the UK, or 12% of adults, now own cryptocurrency. Most of these people are under 55 years old. A 2022 FCA study found that 70% of adults had a savings account, and only 38% held shares. This change comes at a time when people are generally less likely to invest in stocks.
How Tax Reforms Could Boost UK Stocks
The UK currently charges a 0.5% tax on buying shares, bringing in about £3 billion ($3.9 billion) annually. Gordon says lowering this tax while putting it on crypto trades might make more people want to invest in stocks. She says cryptocurrencies are “non-productive assets,” but stocks help the economy grow, make jobs, and bring in business tax money. This could lead to more companies listing on the London Stock Exchange (LSE), which would be good because it would make investing in stocks more appealing.
Conclusion
As part of the Capital Markets Industry Taskforce, Gordon and other top executives are pushing for changes to how money works, which will help the UK markets get back on their feet. She says the UK is still a “haven” compared to the US, where the stock market has been in chaos because of fears of tariffs and a slowdown.
