LONDON — Britain is at risk of losing budding fintech and cryptocurrency entrepreneurs to rival hubs if it doesn’t address pressing regulation and funding challenges, according to industry leaders.

Several crypto bosses told CNBC this week that the U.K. has created an unfavorable environment for fintech and crypto. They argued that the local regulator takes too strict an approach to registering new firms, and that pension funds managing trillions of pounds are too risk-averse

Whereas a decade ago the U.K. was seen as being at “the forefront in terms of promoting competitiveness and innovation,” today things “have shifted more towards prioritizing safety and soundness to an extent where growth has been held behind,” according to Jaidev Janardana, CEO of British digital bank Zopa.

“If I look at the speed of innovation, I do feel that the U.S. is ahead — although they have their own challenges. But look at Singapore, Hong Kong — again, you see much more rapid innovation,” Janardana told CNBC. “I think we are still ahead of the EU, but we can’t remain complacent with that.”

Tim Levene, CEO of venture capital firm Augmentum Fintech, said entrepreneurs face challenges attracting funding in the U.K. and could be tempted to start their founding journeys in other regions, like Asia and the Middle East.

“We’re scrambling around looking for pots of capital in the U.K., where currently it would be more fruitful to go to the Gulf, to go to the U.S., to go to Australia, or elsewhere in Asia, and that that doesn’t feel right,” Levene told CNBC.

Lisa Jacobs, CEO of business lending platform Funding Circle, said that the negative impacts of Brexit are still being felt by the U.K. fintech industry — particularly when it comes to attracting overseas talent.

“I think it is right that we’re paranoid about other locations,” she told CNBC. “It is right that we are trying to — as an industry, as government — make the U.K. still that great place to set up. We have all the ingredients there, because we’ve got the ecosystem, we do have this talent setting up new businesses. But it needs to continue. We can’t rest on our laurels.”

The U.S., for example, has adopted a more pro-crypto stance under President Donald Trump, with the Securities and Exchange Commission dropping several high-profile legal cases against major crypto businesses.

The EU, meanwhile, has led the way when it comes to laying out clear rules for the industry with its Markets in Crypto-Assets (MiCA) regulation.

“The U.S. is driving global tailwinds for the industry,” Craddock said, adding: “MiCA came into force in the EU at the end of last year, while Singapore, Hong Kong and the UAE are moving full steam ahead with pro-industry reforms,” she added.

The U.K. on Tuesday laid out draft proposals for regulating crypto firms — however, industry insiders say the devil will be in the detail when it comes to addressing more complex technical issues, such as reserve requirements for stablecoins.

Last year, the watchdog published a roadmap detailing its plan to implement crypto regulation. The roadmap includes a series of discussion papers on topics ranging from stablecoins to crypto lending over the next two years. A full regulatory regime is expected to go live by 2026.

Another issue faced by crypto companies is that of being “debanked” by high street banks, according to Keith Grose, head of U.K. at Coinbase.

“Debanking is a huge issue — you can’t get bank accounts if you’re a company or individual who works in crypto,” Keith Grose, Coinbase’s U.K. head, told CNBC. “You can’t build the future of the financial system here if we don’t have that level playing field.”

A survey by Startup Coalition, Global Digital Finance and the U.K. Cryptoasset Business Council of more than 80 crypto firms published in January found that half were denied bank accounts or had existing ones closed by major banks.

“I think the U.K. will get it right — but there is a risk if you get it wrong that you drive innovation to other markets,” Coinbase’s Grose told CNBC.

“This is such a fast developing space — stablecoins grew 300% last year. They’re already doing more volume than Visa and Mastercard,” he added. “I think if you deliver smart regulation here, stablecoins can be a foundational part of our payment ecosystem in the U.K. going forward.”

British bank Barclays on Wednesday reported slight beats on the top and bottom line, boosted by stronger investment bank performance.

Pre-tax profit came in at £2.7 billion ($3.6 billion) over the March quarter, compared with analyst expectations of £2.49 billion, according to LSEG. Group revenues hit £7.7 billion, above an analyst projection of £7.33 billion.

Income from its investment bank unit increased 16%. Barclays’ return on tangible equity, a measure of profitability, reached 14 % in the first quarter, after averaging 7.5% in the December quarter.

Key to investors is how Barclays navigates its sizable U.S. exposure in the market storm unleashed by U.S. President Donald Trump’s global trade tariffs. Notably, Barclays has had a significant presence Stateside since acquiring the investment banking and capital markets businesses of collapsed Wall Street titan Lehman Brothers for $1.75 billion.

Speaking to CNBC’s “Squawk Box Europe” on Wednesday, Barclays CEO C.S. Venkatakrishnan said he was expecting “fairly high market volatility” going forward.

“It’s calmer now but I imagine it will continue to go up and down. Beyond that, as you’ve seen in our results, that market volatility helps us help clients manage their risk, we can do so in a profitable way that helps them as well and helps markets income, as long as you manage your risk well.”

Venkatakrishnan continued, “I think, going forward, the longer this goes on, the greater economic uncertainty there is, which is putting companies off from making decisions. Individuals also take time to make decisions, you could have a risk of a slowdown in economic activity.”

The British lender’s U.S. consumer bank business has made strides, delivering a 9.1% return on tangible equity in 2024, from 4.1% in 2023. Barclays shares took a steep tumble as the White House kicked off its trade war on April 2, but recovered thereafter and remain up 10% in the year to date — in sharp contrast to Swiss giant UBS, whose U.S. foothold and domestic concerns have led to a hemorrhage in stock value.

Britain could receive a rare economic boon as a result of its divorce from the European Union, after the bloc was struck with 20% in — now briefly suspended — U.S. reciprocal tariffs in early April. London, which only faces 10% in such White House levies, is now attempting to leverage its historic transatlantic relationship and a broadly more balanced trade record with the U.S. to secure a sweeter commercial arrangement.

Barclays’ pressures at homes have meanwhile eased, with behemoth HSBC announcing plans to wind down its M&A and equity capital markets businesses in the U.K., U.S. and Europe amid a revamp of its investment operations. And the British unit of Spanish lender Banco Santander — which dethroned UBS to become continental Europe’s largest bank by market capitalization in recent weeks — in March said that 750 of its staff were at risk of redundancy, as it targets 95 branch closures as part of a broader plan to update its footprint from June 2025.

While Santander insists that the U.K. remains a “core market,” the latest move has added to questions whether the Spanish lender intends to exit the British high street.

DUBAI, United Arab Emirates — Eric Trump has a warning for banks: change the way you operate, or go extinct.

“The modern financial system is broken, it’s slow, it’s expensive,” the executive vice president of the Trump Organization told CNBC’s Dan Murphy in Dubai while discussing the United Arab Emirates’ development as a cryptocurrency hub.

“There’s nothing that can be done on blockchain that can’t be done better than the way that the current financial institutions are working. SWIFT is an absolute disaster,” Eric Trump said on Tuesday, referring to the global international messaging network for financial transactions.

He lambasted what he described as the slowness and inefficiency of the traditional banking system, calling it “antiquated” — a criticism held by many, especially crypto enthusiasts.

The second son of U.S. President Donald Trump has made frequent visits to the UAE in recent years amid expanding Trump-branded real estate projects in the country and wider Gulf region — and as the desert sheikhdom rapidly becomes a global hub for cryptocurrency.

A vocal advocate of digital currencies, Eric Trump in December predicted that bitcoin would reach $1 million while attending the Bitcoin MENA 2024 conference in Abu Dhabi. 

Crypto markets have proven to be highly volatile amid a sell-off of risk assets, stoked by President Trump’s trade tariffs imposed on countries worldwide. Bitcoin was trading around $95,357 late Tuesday.

“Our banking system favors the ultra-wealthy,” Eric Trump said. “And what actually got me into [cryptocurrency] is the fact I realized our banking system was weaponized against the vast majority of people in our country, either the people that don’t have the zeros on their balance sheet, or people who might have worn that red hat that said ‘Make America Great Again.’ And it forced me into the crypto world. And I’m telling you, if the banks don’t watch what’s coming, they’re going to be extinct in 10 years.”

The Trump administration has vowed to ring in a booming era for the crypto industry, and both President Trump and his wife Melania have launched their own meme coins, leading to concerns from ethics experts about potential conflicts of interest. The Trump family is also at the helm of crypto platform World Liberty Financial, which was co-founded with real estate billionaire and current White House Middle East envoy Steve Witkoff.

Eric Trump and his older brother Donald Trump Jr. recently announced plans to launch a U.S. dollar-backed stablecoin through World Liberty Financial, and in March launched a new bitcoin mining company called American Bitcoin, co-founded with Hut 8 CEO Asher Genoot.

The UAE, meanwhile, continues to attract international crypto investors, startups, exchanges, and highly-attended events in the sector, thanks in large part to supportive government regulations for the crypto industry. Eric Trump and others in both the Trump Organization and the White House administration have lauded their relationships with Arab Gulf leaders, praising what they see as key growth markets with pro-business policies.

Eric Trump’s comments come ahead of his father’s planned visit to the Gulf region from May 13 to 16, during which he is expected to stop in the UAE, Saudi Arabia and Qatar. Trump will be the first U.S. president to visit the Emirati sheikhdom since George W. Bush in 2008. 

The trip is emblematic of the Trump administration’s warm ties with Gulf governments; during his first presidential term, President Trump’s first overseas visit was to Saudi Arabia.