TLDR
- Lisa Gordon, who is known for her insights in the UK financial sector, has put forward the idea of taxing crypto transactions to lower taxes on stock market dealings.
- As it stands, shares traded on the London Stock Exchange are subject to a 0.5% duty in the UK.
- More than 50% of the UK's younger demographic, under the age of 45, own cryptocurrencies but are not invested in traditional equities.
- Lisa Gordon expresses that stocks play a vital role in supporting the economy, whereas she views cryptocurrencies as 'not contributing to productivity'.
- In 2023, there was a notable decline in companies listed on the UK stock market, plummeting to just 18, while 88 companies opted out.
A leading voice in UK banking circles, Lisa Gordon, advocates for imposing taxes on crypto purchases to steer investments towards the stock market, which she believes could invigorate the British economy.
Gordon told The Times On March 23, concerns were raised about the higher propensity for younger Brits to own cryptocurrencies rather than stocks. 'It's alarming that over half of those under 45 are crypto holders with no equity investments,' she remarked.
Gordon has put forth a policy recommendation to reduce the current tax burden on stock purchases while instituting a new tax regime for crypto transactions. 'I would support reducing stamp duties for equities and applying those to cryptocurrency deals,' she asserted.
Presently, a 0.5% charge is imposed by the UK government on shares listed on the London Stock Exchange, generating approximately 3 billion pounds ($3.9 billion) annually.
Gordon is of the opinion that slashing this tax could incentivize more UK citizens to invest in local companies' shares, possibly encouraging more firms to go public within the UK, thereby setting off a virtuous cycle for economic growth.
Unlike stocks, Gordon characterizes cryptocurrency as ‘non-productive,’ as it doesn’t feed back into the broader economy. Her stance underscores a belief that traditional investments offer greater economic benefits than their digital counterparts.
Gordon articulated that 'Equities provide essential growth capital to businesses that create jobs, foster innovation, and pay corporate taxes. That's a social contract we've signed up for, and advocating for it shouldn't be feared,' she elaborated.
Investment Trends Shifting in UK
Cryptocurrency ownership is on the rise in the UK. The Financial Conduct Authority (FCA) disclosed in November that approximately 12% of UK adults have ventured into cryptocurrency, amounting to nearly 7 million individuals.
Statistics illustrate that the majority of crypto holders in the UK are under the age of 55, with this group comprising about 36% of total crypto ownership.
Gordon expressed her concern that many Britons have shifted their focus from investing to just saving money. She cautioned that this trend doesn't offer a sustainable solution for securing a viable retirement.
A 2022 survey by the FCA revealed that while 70% of British adults maintain savings accounts, only 38% own shares directly or through investment platforms. Furthermore, almost 75% of the 18-24 age group were found to lack any form of investments.
Investment behaviors persist despite UK regulations that permit savings of up to 20,000 pounds ($26,000) annually without tax penalties. Data from the FCA indicated that only 25% of the 18-25 demographic and 33% of the 25-44 age group held investments in 2022.
Recent financial strains have exacerbated this situation. The cost of living crisis in the year leading up to January 2024 led 44% of adults to either stop or cut back on their savings or investments.
Nearly a quarter of UK During this period, individuals reported relying on their savings or liquidating investments to meet everyday expenses, further decreasing ordinary people's participation in the market.
Gordon is part of the Capital Markets Industry Taskforce, a coalition of industry leaders dedicated to revitalizing the UK’s financial markets. Her firm, Cavendish, stands to gain from a more robust market as it provides advisory services to companies pursuing public listings.
The London stock market has faced difficulties lately. A review by consulting leader EY noted that 2023 was among the 'quietest years recorded' for the exchange, with only 18 new company listings, a drop from 23 in 2022.
In the same timeframe, 88 firms chose to either delist or relocate from the London exchange, citing reasons like “decreasing liquidity and valuations lower than those in alternative markets such as the US,” for their departure.
Despite these hurdles, Gordon asserted the UK that the UK still serves as a “safe harbor” compared to places like the US, where markets have shed trillions of dollars due to economic policies and recession tensions under President Donald Trump.
Cryptocurrency markets have been taking a hit recently, too. Bitcoin's value dipped by 11% over the last month and has had difficulty maintaining levels above $85,000 since early March.
The most up-to-date figures show Bitcoin trading around $85,640, reflecting a 2% increase in the last day.
