Former FCA official Isadora Arredondo highlights a discrepancy between the UK's crypto ambitions and actual policy implementation.
By Olivier Acuna|Edited by Cheyenne Ligon Jun 24, 2026, 3:23 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Isadora Arredondo, currently with Hedera Global Policy, shared her insights on the U.K. regulatory landscape based on her experience with the FCA. (Isadora Arredondo)SummaryShow- Isadora Arredondo, a former official with the U.K. Financial Conduct Authority now at Hedera, believes the slow progress in the U.K.'s aspirations to become a crypto hub stems more from competing regulatory agendas than outright opposition.
- She notes a divided regulatory approach, where institutional and wholesale crypto initiatives move forward swiftly, while startups and retail-oriented firms face protracted approval processes under outdated regulations instead of a tailored framework like the EU's MiCA.
- Arredondo asserts that the future of digital finance will depend on interoperability and unified standards across various platforms, including blockchains, stablecoins, and CBDCs, highlighting how traditional financial institutions are increasingly embracing crypto innovations.
Isadora Arredondo offers a distinctive perspective on the regulatory environment for cryptocurrency in the U.K. After her tenure at the Financial Conduct Authority (FCA), where she contributed to Brexit-related policy and crypto regulations, she joined Hedera as vice president of global policy.
According to Arredondo, one of the primary challenges hindering the U.K.'s ambition to establish itself as a crypto hub is the disconnect between policy formulation and its actual implementation.
"I had never encountered first-hand the world that separates policy ambition from policy execution," Arredondo shared with CoinDesk during a London interview. "There exists a significant divide between the aspiration to drive policy and its real-world application."
Her remarks came prior to the Bank of England's announcement regarding new stablecoin regulations, which saw the central bank retract an earlier proposal that would have limited the amount of fiat-backed stablecoins individuals and businesses could hold. Instead, the BOE opted for a macro-level "temporary issuance guardrail," capping the total amount of any single systemic stablecoin at £40 billion ($50.6 billion).
Challenges in Crypto Hub Aspirations
To comprehend the slow pace of the U.K.'s aspirations to become a global crypto hub, Arredondo references key events that influenced the FCA during her tenure from 2018 to 2021.
Her perspective differs from that of many within the crypto industry, which often cites regulatory delays and slow approvals as evidence of hostility towards the sector. Instead, Arredondo attributes much of the sluggishness to competing priorities within the regulator itself.
Brexit initially necessitated a comprehensive overhaul of the FCA's regulatory framework for a post-EU environment. This was followed by the economic upheaval caused by the COVID-19 pandemic.
"The COVID crisis shifted crypto from a peripheral issue to a pressing concern," Arredondo explained. "The entire organization pivoted to crisis management, dealing with COVID-related loans, banking responses, and forbearance measures."
As the crisis subsided, the FCA faced the repercussions of notable investment failures, such as the collapses of London Capital & Finance and the Woodford Fund.
These incidents prompted the FCA to adopt a heightened focus on consumer protection, viewing crypto through that lens, particularly under CEO Nikhil Rathi's leadership.
A Dual Regulatory Approach
Arredondo posits that the FCA's strategy toward cryptocurrency has evolved along two distinct tracks: one for large institutions and another for startups and retail firms.
On the institutional front, the FCA has initiated projects like the Digital Securities Sandbox, collaborating with financial entities exploring tokenization and digital assets.
"In terms of institutional engagement with crypto, they are quite proactive and hands-on," Arredondo noted.
Conversely, smaller crypto firms face a different reality.
Unlike the EU's Markets in Crypto Assets (MiCA) framework, which established specific rules for crypto, the U.K. has largely attempted to integrate crypto activities into existing regulatory structures. This often results in lengthy authorization processes and repeated evaluations from various teams for startups, according to Arredondo.
Crypto companies have frequently voiced frustrations over these delays, arguing they hinder business development in the U.K. A recent article in the Financial Times highlighted how the Bank of England's cautious approach has created a significant regulatory bottleneck, even as businesses advocate for rapid integration.
Nevertheless, Arredondo defended the U.K.'s regulatory standards, stating, "While navigating the U.K.'s rules is incredibly challenging, it ultimately yields benefits. Well-regulated businesses flourish, establishing a baseline of institutional credibility."
The new U.K. regulations are expected to take effect in October 2027.
Future Beyond Regulation
Now at Hedera, Arredondo focuses on how governments and central banks are engaging with digital currencies.
Her concern extends beyond the technology itself. "While we have advanced solutions for many challenges, we lack a coordinated effort for interoperability," she remarked.
She emphasizes that the industry has invested years in developing separate blockchain networks, stablecoins, and digital currency initiatives, but has not prioritized ensuring these systems can interoperate effectively.
"We need to transition from a landscape where everyone is pursuing individual innovations to one where we prioritize standard-setting across the board," she urged.
This challenge has become increasingly significant as governments, banks, and private enterprises explore tokenized deposits, stablecoins, and central bank digital currencies (CBDCs).
Arredondo pointed to the European Union as a model for accommodating various forms of digital currency within a unified regulatory framework.
The Role of Wall Street in Crypto
The expanding involvement of banks, asset managers, and major financial institutions in the crypto space has elicited mixed reactions within the industry. Some early advocates of crypto argue that this trend diverges from the sector's foundational goals of decentralization and disintermediation.
Arredondo, however, perceives the situation differently. "The foundational principles of early crypto raised essential economic questions that have now entered the mainstream discourse," she argued.
For Arredondo, the increasing presence of institutional players in crypto does not indicate a failure of the industry's original vision. Instead, she views it as a sign that concepts first introduced in the crypto realm are being embraced by traditional finance. "It shouldn't be seen as disappointing that we are upholding the principles that have historically established trust in currency."
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CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
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In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
By CoinDesk ResearchJun 15, 2026In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Why it matters:
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
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