UK Should Tax Crypto Purchases to Stimulate Stock Investment, Says Banker

The UK should consider scrapping taxes on stock purchases and instead apply them to cryptocurrency investments in order to boost the local economy, argues Lisa Gordon, Chair of investment bank Cavendish. In a recent interview with The Times on March 23, Gordon proposed a strategy that could encourage Britons to invest in local stocks and spark greater economic growth.

Proposal to Tax Crypto Purchases

Gordon emphasized the growing trend of cryptocurrency ownership, particularly among younger generations, and highlighted its potential negative impact on long-term investment. “It should terrify all of us that over half of under-45s own crypto and no equities,” Gordon said, underscoring the shift in investment preferences away from traditional equities. “I would love to see stamp duty cut on equities and applied to crypto.”

Currently, the UK applies a 0.5% stamp duty on shares listed on the London Stock Exchange, which generates approximately £3 billion ($3.9 billion) in tax revenue annually. Gordon believes that reducing this tax could incentivize people to invest in local companies’ stocks, benefiting the broader economy.

For more on the current stock tax system in the UK, you can visit the UK Government's Stamp Duty Guide.

Equities Versus Crypto: A Non-Productive Asset

While crypto has gained popularity, Gordon referred to it as a “non-productive asset” that doesn't contribute to the economy. She argued that equities, on the other hand, provide growth capital to businesses that create jobs, innovate, and pay corporation taxes—fundamentals that ultimately benefit society.

“Equities provide growth capital to companies that employ people, innovate and pay corporation tax. That is a social contract. We shouldn’t be afraid of advocating for that,” Gordon added.

The Rise of Crypto Ownership

According to the UK’s Financial Conduct Authority (FCA), cryptocurrency ownership has surged in recent years. A report published in November 2023 indicated that 12% of UK adults—around 7 million people—owned crypto. Notably, the majority (36%) of crypto owners were under 45 years old, reflecting a generational shift towards digital assets.

Despite this surge in ownership, Gordon warned that many crypto investors have been “shifted to saving rather than investing,” which she argued “is not going to fund a viable retirement.” In contrast, investments in equities can provide long-term growth, contributing to a more secure financial future.

The Need for Investment in UK Stocks

Gordon’s comments come at a time when the UK’s stock market has faced challenges in attracting new listings. A report from consulting giant EY revealed that 2023 was one of the quietest years on record for the London Stock Exchange, with just 18 companies listing their shares, down from 23 in 2022. In the same period, 88 companies delisted or transferred from the exchange, with many citing declining liquidity and lower valuations compared to other markets like the US.

As a member of the Capital Markets Industry Taskforce, Gordon is working with industry leaders to revive the UK’s local market. The initiative seeks to encourage companies to go public in the UK, boosting liquidity and strengthening the country’s economy.

Despite the challenges, Gordon remains optimistic about the UK’s prospects. She referred to the UK as a “safe haven” compared to markets like the US, which has seen significant losses in its stock markets due to fears of a recession and uncertainty surrounding President Donald Trump’s trade policies.

The Slump in Crypto and Equities Markets

The ongoing downturn in both the crypto and stock markets has made headlines recently. As of March 2025, Bitcoin (BTC) has fallen 11% over the past 30 days, struggling to maintain support above the $85,000 level. In the past 24 hours, Bitcoin saw a slight uptick, trading around $85,640. For the latest Bitcoin price updates, you can visit CoinMarketCap.

The slump in the crypto markets has coincided with declines in global stock indices, underscoring the broader economic challenges facing investors. Gordon’s call to tax crypto purchases is seen as a potential solution to channel more investment into the stock market, providing growth capital for businesses and ultimately stimulating the UK economy.

Conclusion

Lisa Gordon’s proposal to tax crypto purchases in place of stock taxes is an interesting and potentially transformative idea for the UK’s economy. As cryptocurrency ownership continues to rise, particularly among younger demographics, Gordon’s call to redirect that capital into equities could help boost local businesses and create long-term growth opportunities. With the UK’s stock market struggling to attract new listings, shifting investment priorities toward domestic companies may provide a solution that benefits both the financial markets and the economy at large.