LONDON - According to industry leaders, the UK is at risk of losing its budding fintech and cryptocurrency entrepreneurs.

Several crypto bosses told CNBC this week that the UK has created an unfavorable environment for fintech and cryptocurrencies. They believe local regulators have taken an overly strict approach to registering new companies, while managing trillions of pounds of pension funds is too risk-averse

Jaidev Janardana, CEO of UK digital bank Zopa, said that a decade ago, the UK was considered the "frontier" of "promoting competitiveness and innovation", and that "things today" tended to prioritize security and rationality, so much so that it lags behind growth. ”

"If I look at the speed of innovation, I do feel that the United States is leading the way - despite their own challenges. But look at Singapore, Hong Kong - again, you'll see faster innovation." "I think we're still ahead of the EU, but we can't stay complacent about it."

Tim Levene, CEO of venture capital firm Augmentum Fintech, said entrepreneurs face challenges of attracting UK funds that could tempt them to start building their founding journey in other regions such as Asia and the Middle East.

"We are looking for the pot of finding capital in the UK, and at the moment, going to the Gulf, going to the United States, going to Australia or elsewhere in Asia will feel more fruitful," Levin told CNBC.

Lisa Jacobs, CEO of the funding circle for commercial loan platforms, said the UK's fintech industry still feels the negative impact of Brexit, especially when attracting overseas talent.

"I think our paranoia about other places is right," she told CNBC. "The right thing is that as an industry, as a government, the UK can still build that good place. We have all the ingredients there because we have an ecosystem and we do have this talent to build new businesses. But it needs to continue. We can't rest."

The UK is home to a vibrant financial technology sector, with companies like Monzo and Revolut becoming challengers to traditional banks in their expansion.

Industry insiders attribute their rapid growth to innovation-friendly rules that allow tech startups to apply for and obtain licenses to provide banking and e-money services more easily.

Businesses doing business in the cryptocurrency world are frustrated that the same thing hasn't happened in their industry.

“Other jurisdictions have begun to seize opportunities,” European managing director of Ripple, a British and European blockchain company, told CNBC.

For example, the U.S. has taken a more intimate stance under the leadership of Donald Trump, while the Securities and Exchange Commission has revoked several high-profile legal cases against major cryptocurrency businesses.

Meanwhile, the EU has formulated clear rules for the industry and established clear rules under cryptoassets (MICA) regulations.

Cradock added: “The United States is driving global headwinds for the industry.

The UK proposed a draft proposal on regulating cryptocurrency companies on Tuesday - but industry insiders say the devil will give a detailed look at solving more complex technical issues, such as reserve requirements for StableCoins.

One area where both Fintech and Crypto leaders want to see more clarity is Stablecoins, a cryptocurrency whose value is pegged to the value of the sovereign currency.

Mark Fairless, CEO of payment infrastructure firm Clearbank, told CNBC that his business has been seeking to develop its own Stablecoin, but it was blocked due to a lack of regulatory clarity.

Fairless told CNBC that Stablecoins is "part of our medium-term, long-term strategy." “We think we’ve done it for that.” However, he added that Clearbank Stablecoin is only possible when regulatory certainty in the UK, the startup is awaiting approval from the Bank of England.

Crypto industry insiders also said the FCA is too restrictive in approving the registration of digital asset companies. FCA is the regulator of registered companies responsible for providing crypto services within the UK money laundering regulations

Last year, the watchdog released a roadmap detailing its plans to implement crypto regulations. The roadmap includes a series of discussion papers on topics, from stablecoins to cryptocurrency loans, over the next two years. It is expected that by 2026, a complete regulatory system will be launched.

Another problem facing cryptocurrency companies is being "revoked" by high street banks, said Keith Grose, head of Coinbase's UK.

"Revocation is a huge problem - if you are a company or individual working in cryptocurrency, you will not be able to get a bank account," Keith Grose, UK head of Coinbase, told CNBC. "If we don't have a competitive environment at this level, you will not be able to build the future of the financial system here."

A survey by the Global Digital Finance and UK Cryptocurrency Business Council, published in January, found that half of the bank accounts or existing large banks were closed.

"I think the UK will do it right - but if you get the risk of bringing innovation to other markets," Coinbase's Grose told CNBC.

"It's a space to grow so quickly - last year, stablecoins grew 300%. They've already done more than Visa and MasterCard," he added. "I think Stablecoins could be the basic part of our payment ecosystem in the UK if you provide smart regulations here."