Chancellor
Faces Taxing Test in Bid to Boost Capital Markets
The
UK Treasury’s latest plan for stimulating its stock exchanges appears to be a
temporary or permanent reduction in the stamp duty (tax) paid on transactions
in shares of newly listed companies.
Advocates
of stamp duty reform have long argued that the UK is at a competitive disadvantage
to other major European markets as a result of the 0.5% tax levied on share
transactions, pointing out that the US and Germany don’t levy any tax on such
transactions.
Join
IG, CMC, and Robinhood in London’s leading trading industry event!
They
claim that removing the stamp duty would stimulate trading in stocks of
UK-listed companies and encourage more people to trade at a time when a lot of
capital is lying idle in savings accounts.
Previous
research has suggested that even a minor reduction in transaction costs can boost
stock prices considerably and that removing the duty could reduce the post-tax
cost of equity of UK listed companies by as much as 8.5%.
One
UK investment bank refers to a ‘pernicious’ tax that negatively impacts
liquidity in UK equity markets and by extension the entire financial sector,
which whether everyone likes it or not is a major contributor to the UK
economy.
Abolish stamp on equity trading. Cut corp tax for first few years after listing. Cut CGT on sale of founder stakes at IPO. Mandate Brit ISA plus 20% of pension equity allocation to UK. And do it VERY FAST. Politicians do not seem to grasp that time is running out. https://t.co/YBxAu6nGiu
— Merryn Somerset Webb (@MerrynSW) October 1, 2025
The
problem the UK government faces is that stamp duty on shares raises several
billion pounds every year. The Chancellor has been talking about making tough
decisions on general taxation to improve public finances ahead of next week’s
budget, so any move to remove tax on investing is likely to provoke a major
backlash.
There
is also the point that the FTSE 100 is trading at near-record levels under the
current tax regime.
Either
way, investors would be well advised not to count their savings just yet.
Earlier this year, the possibility of raising the level of tax on dividends and/or
removing the allowance that sees taxpayers only pay tax on dividend income
above £500 was floated – and with talk of a public finance gap in the tens of
billions, nothing is off the table.
Crypto
Rules – Okay?
The
European Fund and Asset Management Association (EFAMA) has set out its case for
reform of the digital assets framework to fast-track improvements in EU capital
markets.
The
association reckons Distributed ledger technologies (DLT) can provide a solution to challenges such as fragmented
post-trade infrastructures, lack of competition and cross-border flows among
financial market infrastructures and national differences in securities,
taxation and insolvency laws.
A
sense of frustration is understandable. The EU’s DLT pilot regime is coming on for three and a half years old but over that time
just three infrastructures have been granted permission to operate DLT trading
and settlement systems, and only a handful of live transactions have been
facilitated.
Last week’s roundtable was a great opportunity for us to discuss the current state of the digital asset landscape and it’s competitiveness here in Europe.
MiCA gave European banks and financial institutions the confidence to lean into the industry. As a result, we now see lots… pic.twitter.com/9M89WxDNGX
— Cassie Craddock (@CraddockCJ) October 10, 2025
The
obvious response from sceptics would be to suggest that this is indicative of a
lack of interest from potential digital asset service providers. But this would
be to ignore the reality that the regime has met with considerable resistance
from those with a vested interest in maintaining existing capital market
structures.
This
is not to say that the scheme is perfect. The European Commission has not
effectively communicated its scale, leading some potential market participants
to assume that it was a fixed term project that would be superseded over a
relatively short timeframe or that the volume cap might not be removed.
ESMA
has pointed to the failure to support e-money tokens issued by e-money
institutions as a further barrier. Any update to the regime should also enable
settlement in euro-denominated stablecoins licensed under the Markets in
Crypto-Assets Regulation, which would facilitate straightforward access to cash
on-chain and significantly boost the European stablecoin market in its fight
for relevance against cryptocurrencies pegged to the US dollar.
Tanguy
Van de Werve, EFAMA director general observes that many European firms have
made significant investments in DLT and that these efforts should be matched
with a clear commitment from EU authorities to deliver on a DLT-based
ecosystem.
Piecemeal
changes – weighed down by lengthy legislative processes – will not give the
market the necessary signals for further investments.
DATs
Not What Retail Investors Expected
In
a recent LinkedIn post, Anton Golub, chief business officer at Freedx outlined
how retail investors have lost around $17 billion by buying shares of digital asset
treasuries or DATs – firms that explicitly pursue a strategy of accumulating
digital assets as a core function of their business (think Strategy or
Metaplanet).
We’ve all got mixed feelings about DATs.
They’ve become a real force in this cycle and, on the surface, that’s a clear signal: new money flowing straight into spot instead of derivatives or funds. It’s tangible demand, and the market feels it.
But they’re also messy. DATs are… pic.twitter.com/wGDp4yPkN2
— Justin d’Anethan (@justindanethan) October 22, 2025
The
problem is that these investors were not buying Bitcoin, the value of which has
grown strongly this year. Instead, they acquired what he describes as ‘volatility
arbitrage shells’.
DATs
issue convertibles or fixed/moving-strike warrants that hedge funds buy at
premium terms and short the stock to delta hedge, generating significant
revenues. The DAT uses the proceeds to buy Bitcoin and retail investors buys
the stock, thinking it is just leveraged Bitcoin.
But
when volatility compresses, hedge funds lose interest and issuance dries up.
Coin accumulation stops and market net asset value collapses. Metaplanet’s
market cap fell from $8 billion to $3.1 billion despite holding $3.3 billion of
Bitcoin.
As
one crypto specialist put it, too many investors confuse Bitcoin exposure with
exposure to leveraged structures built around the cryptocurrency and chase
Bitcoin-linked instruments without realising they are stepping into a
volatility trade.
There
is also the question of why an investor would put money into a DAT to gain
exposure to Bitcoin when there are plenty of exchange-traded funds that perform
this task more efficiently.
The
solution? Build the next generation of crypto-native public companies on
transparency and genuine alignment with the underlying asset.
Chancellor
Faces Taxing Test in Bid to Boost Capital Markets
The
UK Treasury’s latest plan for stimulating its stock exchanges appears to be a
temporary or permanent reduction in the stamp duty (tax) paid on transactions
in shares of newly listed companies.
Advocates
of stamp duty reform have long argued that the UK is at a competitive disadvantage
to other major European markets as a result of the 0.5% tax levied on share
transactions, pointing out that the US and Germany don’t levy any tax on such
transactions.
Join
IG, CMC, and Robinhood in London’s leading trading industry event!
They
claim that removing the stamp duty would stimulate trading in stocks of
UK-listed companies and encourage more people to trade at a time when a lot of
capital is lying idle in savings accounts.
Previous
research has suggested that even a minor reduction in transaction costs can boost
stock prices considerably and that removing the duty could reduce the post-tax
cost of equity of UK listed companies by as much as 8.5%.
One
UK investment bank refers to a ‘pernicious’ tax that negatively impacts
liquidity in UK equity markets and by extension the entire financial sector,
which whether everyone likes it or not is a major contributor to the UK
economy.
Abolish stamp on equity trading. Cut corp tax for first few years after listing. Cut CGT on sale of founder stakes at IPO. Mandate Brit ISA plus 20% of pension equity allocation to UK. And do it VERY FAST. Politicians do not seem to grasp that time is running out. https://t.co/YBxAu6nGiu
— Merryn Somerset Webb (@MerrynSW) October 1, 2025
The
problem the UK government faces is that stamp duty on shares raises several
billion pounds every year. The Chancellor has been talking about making tough
decisions on general taxation to improve public finances ahead of next week’s
budget, so any move to remove tax on investing is likely to provoke a major
backlash.
There
is also the point that the FTSE 100 is trading at near-record levels under the
current tax regime.
Either
way, investors would be well advised not to count their savings just yet.
Earlier this year, the possibility of raising the level of tax on dividends and/or
removing the allowance that sees taxpayers only pay tax on dividend income
above £500 was floated – and with talk of a public finance gap in the tens of
billions, nothing is off the table.
Crypto
Rules – Okay?
The
European Fund and Asset Management Association (EFAMA) has set out its case for
reform of the digital assets framework to fast-track improvements in EU capital
markets.
The
association reckons Distributed ledger technologies (DLT) can provide a solution to challenges such as fragmented
post-trade infrastructures, lack of competition and cross-border flows among
financial market infrastructures and national differences in securities,
taxation and insolvency laws.
A
sense of frustration is understandable. The EU’s DLT pilot regime is coming on for three and a half years old but over that time
just three infrastructures have been granted permission to operate DLT trading
and settlement systems, and only a handful of live transactions have been
facilitated.
Last week’s roundtable was a great opportunity for us to discuss the current state of the digital asset landscape and it’s competitiveness here in Europe.
MiCA gave European banks and financial institutions the confidence to lean into the industry. As a result, we now see lots… pic.twitter.com/9M89WxDNGX
— Cassie Craddock (@CraddockCJ) October 10, 2025
The
obvious response from sceptics would be to suggest that this is indicative of a
lack of interest from potential digital asset service providers. But this would
be to ignore the reality that the regime has met with considerable resistance
from those with a vested interest in maintaining existing capital market
structures.
This
is not to say that the scheme is perfect. The European Commission has not
effectively communicated its scale, leading some potential market participants
to assume that it was a fixed term project that would be superseded over a
relatively short timeframe or that the volume cap might not be removed.
ESMA
has pointed to the failure to support e-money tokens issued by e-money
institutions as a further barrier. Any update to the regime should also enable
settlement in euro-denominated stablecoins licensed under the Markets in
Crypto-Assets Regulation, which would facilitate straightforward access to cash
on-chain and significantly boost the European stablecoin market in its fight
for relevance against cryptocurrencies pegged to the US dollar.
Tanguy
Van de Werve, EFAMA director general observes that many European firms have
made significant investments in DLT and that these efforts should be matched
with a clear commitment from EU authorities to deliver on a DLT-based
ecosystem.
Piecemeal
changes – weighed down by lengthy legislative processes – will not give the
market the necessary signals for further investments.
DATs
Not What Retail Investors Expected
In
a recent LinkedIn post, Anton Golub, chief business officer at Freedx outlined
how retail investors have lost around $17 billion by buying shares of digital asset
treasuries or DATs – firms that explicitly pursue a strategy of accumulating
digital assets as a core function of their business (think Strategy or
Metaplanet).
We’ve all got mixed feelings about DATs.
They’ve become a real force in this cycle and, on the surface, that’s a clear signal: new money flowing straight into spot instead of derivatives or funds. It’s tangible demand, and the market feels it.
But they’re also messy. DATs are… pic.twitter.com/wGDp4yPkN2
— Justin d’Anethan (@justindanethan) October 22, 2025
The
problem is that these investors were not buying Bitcoin, the value of which has
grown strongly this year. Instead, they acquired what he describes as ‘volatility
arbitrage shells’.
DATs
issue convertibles or fixed/moving-strike warrants that hedge funds buy at
premium terms and short the stock to delta hedge, generating significant
revenues. The DAT uses the proceeds to buy Bitcoin and retail investors buys
the stock, thinking it is just leveraged Bitcoin.
But
when volatility compresses, hedge funds lose interest and issuance dries up.
Coin accumulation stops and market net asset value collapses. Metaplanet’s
market cap fell from $8 billion to $3.1 billion despite holding $3.3 billion of
Bitcoin.
As
one crypto specialist put it, too many investors confuse Bitcoin exposure with
exposure to leveraged structures built around the cryptocurrency and chase
Bitcoin-linked instruments without realising they are stepping into a
volatility trade.
There
is also the question of why an investor would put money into a DAT to gain
exposure to Bitcoin when there are plenty of exchange-traded funds that perform
this task more efficiently.
The
solution? Build the next generation of crypto-native public companies on
transparency and genuine alignment with the underlying asset.