Former FCA policymaker and Hedera Global Policy VP Isadora Arredondo argues that the UK’s crypto ambitions are being undermined by a structural gap between policy design and real-world implementation.
With prior experience at the UK Financial Conduct Authority (FCA), where she worked on Brexit-era reforms and later crypto regulation, Arredondo brings an insider perspective on how regulatory intent often diverges from execution.
In her view, the UK’s slow progress toward becoming a global crypto hub is not primarily about lack of ambition, but about how policies are carried out once they leave the drafting stage.
Speaking to CoinDesk in London, she said she had not fully appreciated “the world that separates policy ambition from policy execution,” describing a persistent “great divide” between regulatory goals and their practical delivery.
The interview came ahead of the Bank of England’s updated stablecoin framework, which replaced earlier proposals to cap individual holdings with a broader systemic limit of £40 billion ($50.6 billion) per stablecoin.
Ambition vs execution in UK crypto policy
Arredondo points to her FCA tenure from 2018 to 2021 as a key period that explains today’s regulatory approach.
She pushes back on the idea that the FCA is anti-crypto, arguing instead that competing priorities and external shocks slowed progress.
Brexit required a major overhaul of financial regulation, while the COVID-19 crisis shifted the FCA into emergency response mode focused on lending schemes and financial stability.
As a result, crypto moved down the priority list, she said, becoming a secondary concern during a period of institutional strain.
Afterward, the regulator also had to deal with high-profile failures such as London Capital & Finance and the Woodford Fund, reinforcing a stronger emphasis on consumer protection.
This combination of events, she argues, shaped a more cautious and risk-focused stance toward crypto under FCA leadership.
Diverging regulatory tracks
Arredondo describes the FCA’s crypto policy as split into two distinct approaches.
Large financial institutions benefit from more open engagement, including sandbox initiatives like the Digital Securities Sandbox and ongoing work around tokenization.
By contrast, smaller crypto firms face a slower and more complex approval process.
Unlike the EU’s MiCA framework, which introduced dedicated crypto legislation, the UK has largely tried to adapt existing financial rules to digital assets.
According to Arredondo, this creates longer licensing timelines and repeated rounds of review across different regulatory teams.
While acknowledging industry frustration with these delays, she maintains that the UK’s strict standards ultimately help build stronger institutional trust.
Full UK crypto regulations are expected to be implemented in October 2027.
The interoperability challenge
Now working at Hedera, Arredondo focuses on how governments and central banks are approaching digital money infrastructure.
She argues that the main barrier is not innovation itself, but the lack of interoperability between different systems.
Although blockchain networks, stablecoins, and tokenized assets are expanding rapidly, she says they remain largely siloed.
Instead of isolated development, she calls for coordinated standards that allow these systems to connect and function together.
This issue is becoming increasingly important as governments explore stablecoins, tokenized deposits, and central bank digital currencies simultaneously.
She points to the European Union as an example of a jurisdiction attempting to integrate multiple forms of digital money within a unified framework.
Institutional adoption and evolving narratives
The growing involvement of banks and large financial institutions in crypto has sparked debate about whether the industry is drifting away from its original decentralized ethos.
Arredondo rejects that framing.
She argues that institutional participation reflects the mainstream adoption of ideas that originated within crypto rather than a departure from them.
In her view, early crypto innovation helped surface fundamental questions about money and trust that are now being absorbed into traditional finance.
Rather than signaling compromise, she sees this evolution as evidence that digital asset principles are becoming embedded in the broader financial system.
