He London Stock Exchange should court a generation of cryptocurrency investors to revive its fortunes, the city minister suggested.
Bim Afolami said encouraging the six million people in Britain who own cryptocurrencies to buy stocks and shares would help improve the London stock marketRussia's appeal on the world stage.
Afolami said: “These are not people who don't want to invest. They are not people who do not want to take risks. So the question we are going to ask ourselves is why don't they do it in the main financial markets?
“Crypto asset holders are overwhelmingly skewed toward people under 40 years of age. Let's try to get them to the main financial markets.
"I clearly believe that many of them, if we make the conventional financial market attractive enough, will do so and that will help the flow of capital into our capital markets."
Afolami, speaking at a Bloomberg event, said encouraging this group to invest in stocks could trigger a "capital markets renaissance."
He cited research from think tank New Financial, which showed that the proportion of UK households owning stocks and shares has more than halved, from 23 per cent in 2003 to 11 per cent in 2022.
Meanwhile, cryptocurrency ownership has risen steadily in recent years, with almost one in ten Britons now owning some form of digital token, according to the Financial Conduct Authority.
The decline in public interest in the stock market has contributed to fears that London is entering a “fatal circle” where its increasingly fading meaning reinforces itself.
The London Stock Exchange has been struggling to attract new companies and has struggled to prevent already listed companies from leaving the market.
London missed the presentation by Arm, the Cambridge chip designer, which was made public in New York in a Valuation of 54 billion dollars despite lobbying from Rishi Sunak and Jeremy Hunt.
London companies raised less than £1 billion last year, a 40 percent drop compared to 2022, and there were no public offerings in the final quarter of the year. While there has been a dearth of public market listings around the world, London has seen some of the steepest declines.
Mr Afolami said he wanted to use the sale of Government stake in NatWest this year to help “drive” an increase in retail investment across the UK to boost the economy.
The Treasury's economic secretary said the sale would help encourage more young investors to enter the market. The government owns 36% of NatWest.
Afolami said he wanted to counter “the modern trend of trying to eliminate all risks, which has only accelerated after the Covid pandemic.”
Afolami said: “This culture of safety, the culture of the ubiquitous 20 mile per hour speed limit, which prioritizes the feeling of safety and the elimination of risk at all costs. Look, this is understandable, but it is a deeply harmful instinct.”
He added: "It doesn't make sense that we have the safest cemetery."
Chancellor Jeremy Hunt said in November that the Treasury was exploring options to sell its remaining stake in the top bank in the next 12 months.
In a boost for the London market, Cambridge technology company Raspberry Pi said on Thursday that the UK was a better place for its company than New York.
Eben Upton, chief executive of the British computer maker, said he was in favor of listing in London after evaluating the US markets and deciding they were not suitable for his business.
He said: “We went and had a look in New York. We conclude that London is the right home for a company like Raspberry Pi.”
Raspberry Pi designs and manufactures computers with a single circuit board the size of a credit card. It is targeting a stock market float that is expected to value the business at £400m.
Upton told the BBC's Today program that he "got on that plane probably leaning towards the United States" but came back "really leaning the other way."
Afolami also announced on Thursday that a new trading platform would be created later this year to give private companies better access to UK capital markets.
The Intermittent Trading Center (ITV) was committed as part of Mr Hunt's Mansion House renovations and will be called Pisces.
Hunt has said he wants to use financial services reform to unleash a "Big Bang 2.0", a nod to the surge in market activity that followed deregulation under Margaret Thatcher in the 1980s.
