It will be a charter for fraudsters. It will usher in an open-season mindset for money launderers and criminals. And it will drag down the reputation of the City. There will be plenty of critics of today’s government decision to push forward with a regulated cryptocurrency market in London. In the wake of the FTX scandal, one of the largest in corporate history, many would rather see it banned completely. But crypto is more resilient than that – and the UK, if moves quickly, it can carve out a lucrative space as its leading hub.

No one could accuse Rishi Sunak or Jeremy Hunt of taking any risks with the British economy. Nor have the Prime Minister or Chancellor shown much interest in boldly re-inventing the country’s business model. So long as the pound is not in freefall, they seem to feel they have done enough. Even so, they may finally have found at least one reform that, at the margins, shows some signs of radicalism. The Treasury today set out plans for creating a regulatory framework for trading cryptocurrencies in London. It will include plenty of oversight, along with safeguards for investors. But the important point is this: it will be relatively liberal, and a lot more welcoming than the regulations planned in the European Union – or indeed in the US.

True, it is volatile. But the same can be said of many assets. It doesn’t mean crypto is devoid of value.

Sure, the move will attract plenty of criticism. The FTX collapse has confirmed for many people that digital currencies such as Bitcoin should be outlawed completely. They are flimsy, fragile and often fraudulent. At best, they are just another vehicle for speculation. At worst, they are a cover for criminals. Creating a market for them, even if it is a regulated one, is just another example of the UK encouraging the worst excesses of financial capitalism.

Well, perhaps. And yet the mainstream critics of Bitcoin – and other cryptocurrencies – miss how resilient it is. Bitcoin has been through four major booms and busts so far and has bounced back each time. It fell heavily after FTX collapsed but, true to form, has rallied since then, and is now trading at $23,000, up almost 40 per cent since the start of the year. Anyone who assumed that it was dead when its main exchange went down has been proved wrong. True, it is volatile. But the same can be said of many assets (just look at the price of oil). It doesn’t mean crypto is devoid of value.

London can carve out a space for a properly regulated crypto market. The city has the legal framework, the global reputation and the depth of trading and financial expertise to do it properly, and to create a place where investors can feel their digital assets are safe. Other financial centres could do that as well, but right now they are too busy condemning it to see the opportunity. Sunak and Hunt may not have got many things right. But embracing cryptocurrencies and moving forward with a properly regulated market can only strengthen the City of London – and the battered UK economy as well.