Cavendish Chair Warns of Cryptocurrency Trend, Calls for Stock Tax Cut
1min read Lisa Gordon, the Chair of Cavendish Investment Bank, has expressed concerns about the increasing popularity of cryptocurrencies in the UK, particularly among individuals under 45. She highlighted that more than half of this demographic own digital currencies but lack investments in stocks, a trend she believes could negatively impact both personal wealth and the broader economy over the long term.
Gordon emphasized the importance of stocks in driving company growth. Unlike cryptocurrencies, stocks provide essential funding for businesses, which in turn creates jobs, fosters innovation, and contributes to the economy through taxation. She described cryptocurrencies as "non-productive assets" that do not offer the same tangible economic benefits as stocks, despite their potential for speculative gains.
To address this issue, Gordon proposed reducing the 0.5% stamp duty on London-listed stocks and implementing a similar tax on cryptocurrency transactions. This measure, she believes, could encourage more investment in traditional assets that support economic growth. By making crypto purchases subject to taxation, the government could potentially generate additional revenue while steering capital towards more productive investments.
As a member of the Capital Markets Industry Taskforce, Gordon also advocated for better public understanding of capital markets to stimulate economic growth. While acknowledging the current challenges in the market, she remains optimistic about the UK's role as a financial hub. Gordon urged the government to take action to attract more investments back into UK markets, which she considers essential for maintaining London's competitiveness in the global financial sector.
Ask Aime: How might reducing the stamp duty on stocks and taxing cryptocurrency transactions affect the UK's economic growth and financial sector competitiveness?
Gordon's proposal comes at a time when investment interest in stocks has been declining, with many investors shifting their focus to cryptocurrencies. This trend raises concerns about the future of the London Stock Exchange and its ability to attract new listings. By redirecting investment towards equities, Gordon believes that the UK can support innovative companies and drive economic growth, aligning with broader economic policy goals.
