- Lisa Gordon advocates taxing crypto to boost UK stock market investments and growth.
- FCA says over 7 million UK adults own crypto, yet many lack equity investments.
- London Stock Exchange sees fewer listings, signaling need for tax reform to revive market.
The government of the United Kingdom is being advised to introduce a trading tax on cryptocurrencies to encourage its people to trade in local stocks. Raising concern over the issue, Lisa Gordon, the Chair of Investment Bank Cavendish, stated that a majority of the population preferred cryptocurrencies over equities, stunting the economic growth of the U.K.
Crypto’s Growing Popularity and Impact on UK Investment Trends
In an interview, Gordon stated that more than 50% of 45-year-olds or younger Britons held digital assets than domestic equities. According to Gordon, the British government should implement a stamp duty on cryptocurrency deals and lower taxes on stock shares. Gordon emphasized that this move would transfer money into British companies and encourage firms to list publicly, benefitting economic development.
Currently, the UK imposes a 0.5% stamp duty on shares listed on the London Stock Exchange. This tax contributes approximately 3 billion British pounds ($3.9 billion) annually to the UK’s revenue. Gordon believes that reducing this tax could encourage individuals to invest their savings into local company shares, benefiting both the companies and the broader economy.
Crypto vs Equities: A Productive vs Non-Productive Asset Debate
Gordon criticized cryptocurrencies, labeling them as “non-productive assets”, citing that they don’t contribute to economic growth, whereas equities are “growth capital” for companies, creating jobs and helping to pay corporate taxes, thereby benefiting a wider community.
The UK Financial Conduct Authority (FCA) reported in November that approximately 12% of UK adults—about 7 million people—owned cryptocurrency, with a significant portion of these individuals being under 55. Gordon pointed out that a larger portion of individuals have shifted towards saving rather than investing, which could have long-term negative consequences for their financial futures. A 2022 FCA survey found that while 70% of adults had a savings account, only 38% held shares directly or through tax-advantaged accounts.
Related: Coinbase Becomes UK’s Largest VASP After FCA Approval
UK Market Struggles and Potential for Growth
The UK stock market has faced significant challenges in recent years. According to consulting firm EY, the year 2023 saw one of the quiet years recorded on the London Stock Exchange, with only 18 companies going public, a sharp decline from 23 in 2022. Additionally, 88 companies delisted or transferred from the exchange, often citing declining liquidity and lower valuations than other markets, particularly the US.
Despite these setbacks, Gordon remains optimistic about the UK’s potential, describing it as a “safe haven” in contrast to the US stock market, which has suffered from tariff threats and fears of a recession under President Donald Trump’s administration. The cryptocurrency market has also experienced downturns, with Bitcoin recently struggling to maintain support above $85,000.
Gordon’s call for tax reforms is part of her effort to rejuvenate the UK’s stock market. As a Capital Markets Industry Taskforce member, she advocates for policies that could help attract more companies to list on the London Stock Exchange, benefiting both the market and the broader economy.
