With the UK elections looming and the Conservatives potentially losing ground, the stance on crypto has become a focal point in the political landscape. Unlike in the US, where crypto has become a cornerstone of political discourse, the UK’s major parties have largely overlooked digital assets in their campaigns.
Yet, the data from the Financial Conduct Authority highlights a significant crypto ownership rate among UK adults, with nearly five million people involved by August 2021. The recent bullish trends in the crypto market suggest these numbers have likely grown since then.
Conservative Ambitions and Current Poll Standing
Prime Minister Rishi Sunak and the Conservative Party have vocalized ambitions for the UK to become a “global cryptoasset hub.” However, with the Tories facing a steep decline in popularity, these aspirations risk remaining unfulfilled. Projections from The Economist even suggest they have less than a 1% chance of retaining power.
Crypto’s Courtship of Labour
Faced with the prospect of a Labour victory, crypto businesses are now turning their attention to the opposition, which holds a commanding lead in the polls. Early efforts to build relationships have already shown promise. For instance, Coinbase hosted shadow chancellor Rachel Reeves at a breakfast event in Davos earlier this year, indicating an early willingness to engage with potential future policymakers.
Coinbase has further solidified its commitment with the “Stand With Crypto” campaign in the UK, originally launched in the US to mobilize the crypto community in legislative advocacy. The initiative’s UK launch at the House of Commons drew significant attention, attracting both government ministers and senior Labour figures.
The Crypto Manifesto and Policy Priorities
Coinbase’s seven-point plan, akin to a manifesto, outlines key recommendations for fostering the UK’s fintech and crypto leadership:
- Welcoming fintech, Web3, and crypto firms to operate in Britain
- Establishing a comprehensive regulatory framework for crypto assets
- Providing clarity on regulatory aspects like staking
- Exploring decentralization’s potential economic impacts
- Integrating blockchain to enhance public services efficiency
- Launching a tokenization strategy for the City of London
- Updating legal frameworks to accommodate digital assets
Labour’s Policy Agenda and Potential Reversals
Despite these overtures, it remains uncertain whether crypto will be a top priority for Sir Keir Starmer’s Labour government if elected. Starmer has outlined immediate priorities like fiscal discipline, healthcare reforms, and law enforcement bolstering, which may overshadow crypto policies in the short term.
Concerns and Optimism in the Crypto Sector
One pressing concern for the crypto community is whether Labour would backtrack on crypto-friendly policies introduced under Sunak. For instance, pending stablecoin legislation faces uncertainty post-election. The Crypto Council for Innovation, however, remains cautiously optimistic, suggesting continuity in large legislative pieces despite a change in government.
Conclusion
As the UK heads to the polls, the future of crypto regulation hangs in the balance. While Labour appears poised to seize power, their stance on crypto remains less defined compared to the Conservatives. For the crypto industry, navigating these uncertainties presents both challenges and opportunities, depending on the electoral outcome and subsequent policy shifts.
