Two serving ministers have broken cover to urge Rishi Sunak’s government to “lead the way” and increase defence spending to at least 2.5% at a time of growing threats.
In a highly unusual intervention, Anne-Marie Trevelyan, a foreign office minister and former defence minister, and Tom Tugendhat, the security minister and an experienced soldier, published an article online that does not appear to have been sanctioned by Downing Street.
“It’s clear to us that the UK needs to lead the way in increasing our own domestic defence and security spending commitments to 2.5% and beyond,” they wrote in a piece posted on Ms Trevelyan’s LinkedIn page on Friday evening.
“Former defence secretary Ben Wallace and prime minister Boris Johnson made inroads into growing our defence budgets, which had been shrinking in real terms for years. But that only filled the hole. Now we need growth.”
The alarm call by two serving ministers with deep expertise in defence and security comes amid growing disquiet among Conservative MPs and military insiders at a failure by Chancellor Jeremy Hunt to announce new funding for the armed forces in his spring budget, even though the defence secretary has warned the UK is in a “pre-war world”.
Instead, Mr Hunt just reiterated a vague pledge to increase defence spending to 2.5% of national income – from just over 2% at present – “as soon as economic conditions allow”.
Underlining their focus, Ms Trevelyan and Mr Tugendhat urged the government to strengthen the UK’s nuclear deterrent, regrow the Royal Navy, invest in more weapons and ammunition and accelerate plans to build a new generation of fighter jets for the air force.
They also stressed the need to invest in the UK’s defence industrial base.
“None of this is wasted cash. It’s investment in our own economy. And it protects our future economic security,” the ministers said.
Advertisement
“The sad truth is that the world is no longer benign. Protecting ourselves requires investment. And effective investment means that our industrial complex must grow and strengthen at much greater pace than at present.
“We cannot turn on the complex platforms and weapons which ensure military advantage overnight. We must start that growth now, invest at pace to support our allies and stay ahead of our adversaries.”
Image: British Army soldier training on Salisbury Plain, Wiltshire. Pic: PA
How UK defence spending compares to China and Russia
They pointed to how China has just announced a 7.2% rise in its defence budget to $230bn (£179bn) – more than twice what it was a decade ago.
Russia, they said, “is committed to spending 40% of its expenditure on defence and security this year. Vast sums by any standard to fight its illegal war in Ukraine”.
By contrast, UK defence spending has risen 28% from £43bn to £55bn over the last 10 years, they said.
The ministers did not specifically refer to this year’s budget, but military experts have expressed dismay that the level of funding set out in official tables on Wednesday appeared to track a decline of £2.5bn in defence spending in the financial year to March 2025 compared with the previous 12 months.
The Ministry of Defence said this was because the data did not include new money for the military that was pledged last autumn, as well as assistance to Ukraine.
Image: British soldiers taking part in a NATO allied troops training exercise in North Macedonia. Pic: Reuters
Europe must secure borders, ministers say
Ms Trevelyan, who is charged with the Indo-Pacific region in the Foreign, Commonwealth and Development Office, underlined the importance of Europe stepping up to secure its borders as the United States increasingly focuses on the challenge posed by China.
Mr Tugendhat underlined the threats he sees at home “funded by illicit drug money, weapons trafficking and the abuses of modern slavery and people trafficking”.
He warned: “Those who wish our country, and our way of life, harm are more active than ever.”
Prediction markets Polymarket and Kalshi view Kevin Hassett, US President Donald Trump’s National Economic Council director, as the favorite to replace Jerome Powell as the next Federal Reserve chair.
The odds of Hassett filling the seat have spiked to 66% on Polymarket and 74% on Kalshi at the time of writing. Hassett is widely viewed as crypto‑friendly thanks to his past role on Coinbase’s advisory council, a disclosed seven‑figure stake in the exchange and his leadership of the White House digital asset working group.
Founder and CEO of Wyoming-based Custodia Bank, and a prominent advocate for crypto-friendly regulations, Caitlin Long, commented on X:
“If this comes true & Hassett does become Fed chairman, anti-#crypto people at the Fed who still hold positions of power will finally be out (well, most of them anyway). BIG changes will be coming to the Fed.”
Hassett is a long-time Republican policy economist who returned to Washington as Trump’s top economic adviser and has now emerged as the market-implied frontrunner to lead the Fed.
His financial disclosure reveals at least a seven‑figure Coinbase stake and compensation for serving on the exchange’s Academic and Regulatory Advisory Council, placing him unusually close to the crypto industry for a potential Fed chair.
Still, crypto has been burned before by reading too much into “crypto‑literate” resumes. Gary Gensler arrived at the Securities and Exchange Commission with MIT blockchain courses under his belt, but went on to preside over a wave of high‑profile enforcement actions, some of which critics branded as “Operation Chokepoint 2.0.”
A Hassett-led Fed might be more open to experimentation and less reflexively hostile to bank‑crypto activity. Still, the institution’s mandate on financial stability means markets should not assume a one‑way bet on deregulation.
The Hassett odds have jumped just as the Fed’s own approach to bank supervision has received pushback from veterans like Fed Governor Michael Barr, who earned his reputation as one of Operation Chokepoint 2.0’s key architects.
According to Caitlin Long, while he Barr “was Vice Chairman of Supervision & Regulation he did Warren’s bidding,” and he “has made it clear he will oppose changes made by Trump & his appointees.”
On Nov. 18, the Fed released new Supervisory Operating Principles that shift examiners toward a “risk‑first” framework, directing staff to focus on material safety‑and‑soundness risks rather than procedural or documentation issues.
In a speech the same day, Barr warned that narrowing oversight, weakening ratings frameworks and making it harder to issue enforcement actions or matters requiring attention could leave supervisors slower to act on emerging risks, arguing that gutting those tools may repeat pre‑crisis mistakes.
Days later, in Consumer Affairs Letter 25‑1, the Fed clarified that the new Supervisory Operating Principles do not apply to its Consumer Affairs supervision program (an area under Barr’s committee as a governor).
If prediction markets are right and a crypto‑friendly Hassett inherits this landscape, his Fed would not be writing on a blank slate but stepping into an institution already mid‑pivot on how hard (and where) it leans on banks.
HashKey Holdings, the parent company of one of Hong Kong’s biggest licensed crypto exchanges, moved a step closer to a public listing, according to new filings from the Hong Kong Stock Exchange (HKEX).
On Monday, the HKEX published a 633-page post-hearing information pack for HashKey Holdings. The document was published at the request of The Stock Exchange of Hong Kong Limited and the local financial regulator, the Securities and Futures Commission (SFC).
A post-hearing information pack is only published after HKEX’s listing committee formally clears an applicant at the listing hearing. In other words, without explicitly stating it, this document indicates that HashKey has moved closer to listing on the exchange and is progressing toward its initial public offering (IPO).
At the same time, the document stressed that the deal is not yet finalized. “The listing application referred to in this document has not yet been approved; the HKEX and the SFC may accept, return, or reject the public offering and/or listing application.”
This is standard HKEX disclaimer language and does not contradict HashKey’s approval. Instead, it refers to the listing being dependent on completing the offering documents.
Hong Kong Exchange trade lobby in 2007. Source: Wikimedia
HashKey’s IPO is likely to attract significant attention
The news follows early October reports that HashKey was aiming for an IPO and a listing in Hong Kong this year. At the time, the report was largely based on rumors, citing anonymous sources with purported knowledge of the matter.
HashKey is Hong Kong’s top crypto exchange with a 24-hour volume of nearly $108 million at the time of writing, according to CoinGecko data. The information pack also listed the world’s top bank, JPMorgan, and local financial institutions Guotai Junan International and Haitong International as joint sponsors for the listing.
Interest in the offering is likely high, considering that in mid-February, China-based Gaorong Ventures reportedly invested $30 million in HashKey, granting it unicorn status. The pre-money valuation of the investment was purportedly almost $1.5 billion, but reports cited unidentified sources that could not be independently verified.
This was followed by reports in late October that Chinese technology giants, including Ant Group and JD.com, had reportedly suspended plans to issue stablecoins in Hong Kong due to regulatory concerns. On Saturday, the People’s Bank of China — mainland China’s central bank — said after a meeting with 12 other agencies that “virtual currency speculation has resurfaced,” reiterating that “virtual currency-related business activities constitute illegal financial activities,” in line with its 2021 ban on crypto trading and mining.
Sony Bank, the online lending subsidiary of Sony Financial Group, is reportedly preparing to launch a stablecoin that will enable payments across the Sony ecosystem in the US.
Sony is planning to issue a US dollar-pegged stablecoin in 2026 and expects it to be used for purchases of PlayStation games, subscriptions and anime content, Nikkei reported on Monday.
Targeting US customers — who make up roughly 30% of Sony Group’s external sales — the stablecoin is expected to work alongside existing payment options such as credit cards, helping reduce fees paid to card networks, the report said.
Sony Bank applied in October for a banking license in the US to establish a stablecoin-focused subsidiary and has partnered with the US stablecoin issuer Bastion. Sony’s venture arm also joined Bastion’s $14.6 million raise, led by Coinbase Ventures.
Sony Bank has been actively venturing into Web3
Sony Bank’s stablecoin push in the US comes amid the company’s active venture into Web3, with the bank establishing a dedicated Web3 subsidiary in June.
“Digital assets utilizing blockchain technology are incorporated into a diverse range of services and business models,” Sony Bank said in a statement in May.
“Financial services, such as wallets, which store NFT (non-fungible tokens) and cryptocurrency assets, and crypto exchange providers are becoming increasingly important,” it added.
Sony Bank established a Web3 subsidiary with an initial capital of 300 million yen ($1.9 million) in June 2025. Source: Sony Bank
The Web3 unit, later named BlockBloom, aims to build an ecosystem that blends fans, artists, NFTs, digital and physical experiences, and both fiat and digital currencies.
Sony Bank’s stablecoin initiative follows the recent spin-off of its parent, Sony Financial Group, which was separated from Sony Group and listed on the Tokyo Stock Exchange in September.
The move was intended to decouple the financial arm’s balance sheet and operations from the broader Sony conglomerate, allowing each to sharpen its strategic focus.
Cointelegraph reached out to Sony Bank for comment regarding its potential US stablecoin launch, but had not received a response by the time of publication.