- Lisa Gordon urges UK to tax crypto to revive stock market growth.
- Proposal aims to shift funds from crypto to boost local investments.
- UK faces stock market stagnation with fewer IPOs and delistings.
Cavendish investment bank chair, Lisa Gordon has proposed cryptocurrency taxation to drive investments into local stocks. Gordon proposes a tax shift which transfers the stamp duty from equities to crypto or reduces stamp duty on equities. The proposal aims to direct its funds towards UK businesses to propel economic growth in the country.
Gordon’s Proposal to Boost UK Economy
A 0.5% stamp duty applies to all stock purchases conducted on the London Stock Exchange in the UK. Each year this tax brings in about £3 billion for the government. Gordon proposes moving the stamp duty from equities to crypto because it would attract more citizens to buy shares from local businesses.
Gordon expressed concerns about the situation where over 50% of people under 45 years hold cryptocurrency but lack equity investments. She considers crypto as an “non-productive asset” unlike equities which provide investment capital for businesses. These businesses then generate employment opportunities and pay taxes to the government.
Gordon highlighted that equities contribute to long-term growth and economic stability. Gordon argues that an increase in local stock ownership could revitalize the British stock market. She explained how this shift would establish employment opportunities, support corporate innovation and boost fiscal contributions to the government.
Who Owns Crypto and Who Saves in The UK?
According to the Financial Conduct Authority, 7 million UK adults which represents 12% of the population own cryptocurrencies. The FCA’s November survey revealed that the majority of digital asset owners are below 45 years old. Gordon believes that many crypto holders lack investment strategies which would protect their future financial stability.
The FCA’s survey indicated that 70% of British adults owned savings accounts. However, the data reveals that only 38% of adults have direct ownership of shares or through investment accounts. This demonstrates poor performance between savings and investments especially for younger adults.
Recent data from FCA show that the rise in the cost of living has compelled many adults to decrease their investments or savings. Approximately 44% of adults had halted or reduced their investment and saving activities. Everyday expenses compelled nearly 25% adults to withdraw money from their savings or sell their investments.
Impact of Crypto Taxation to UK Stock Market
Gordon is a member of the Capital Markets Industry Taskforce that aims to revive the stock market in the UK. Her proposal aims to revitalize the market which has witnessed a decrease in new listings in recent years. A report from EY consulting firm shows that the UK experienced its least active year for initial public offerings (IPOs).
A large number of companies have chosen to either delist or transfer to US exchange platforms. EY attributes this development to factors such as decline in liquidity levels and lower valuations in the UK. However, Gordon believes that the UK offers investors a more secure environment compared to the US markets.
The digital asset market has seen a decline in its financial performance. Bitcoin’s value has declined by 11% in the last month and struggles to sustain its support above $85,000. Gordon argues that crypto-taxation would redirect investments to the stock market and boost the UK economic growth.