Ex-FCA policy insider explains the ‘great divide’ in the UK’s crypto ambition

Arredondo argues that the industry has spent years building separate blockchain networks, stablecoins and digital money projects, but has spent less time ensuring those systems can work together.

“We need to move the market from everyone doing their own very cool things to actually thinking about standard-setting across the piece.”

The issue has become more important as governments, banks and private companies increasingly experiment with tokenized deposits, stablecoins and central bank digital currencies (CBDCs).

Arredondo pointed to the European Union (EU) as an example of a jurisdiction seeking to accommodate multiple forms of digital money simultaneously.

The EU’s approach allows stablecoins, tokenized bank deposits and central bank money to coexist under the same broad framework, she said.

Wall Street’s crypto role

The growing role of banks, asset managers and large financial institutions in crypto has divided the industry. Some early crypto supporters argue the sector is moving away from its original goals of decentralization and disintermediation.

Arredondo sees it differently. “The early crypto vision raised fundamental economic questions and brought them to the mainstream,” she said.

For Arredondo, the rise of institutional crypto does not mean the industry’s early ideas failed.

Instead, she sees it as evidence that ideas first developed inside the crypto sphere are increasingly being adopted by mainstream finance. “It shouldn’t be disappointing that we are maintaining the pillars that have long anchored trust in money.”