A new UK policy report from the Solana Research Institute has warned that upcoming crypto regulations could push validators, staking providers, and wallet firms out of the country.

The authors claim it will create what they describe as a form of “digital isolation” from permissionless blockchain networks.

The report, titled The Loneliness of Misunderstanding: The UK’s Crypto Sakoku and the FCA’s 2026 Regulations, argues that the UK’s proposed framework risks treating core blockchain infrastructure providers like traditional financial intermediaries.

The paper compares Japan’s historical “sakoku” isolationist policy to the approach. It claims the UK could effectively cut itself off from innovation happening across…