Crypto has emerged as a focal point in the U.S. presidential campaign, with Donald Trump aligning himself closely with Bitcoin enthusiasts. In contrast, as the UK approaches its upcoming election in just over two weeks, digital assets have not received significant attention from the candidates.
However, the case could be made that they should. Recent data from the Financial Conduct Authority reveals that as of August 2021, 9% of UK adults owned cryptocurrency, amounting to nearly five million people. Given the recent bullish market trends, these numbers are likely understated.
Despite the lack of public discourse, there has been discreet lobbying behind the scenes. Prime Minister Rishi Sunak and the Conservative Party have expressed ambitions for the UK to establish itself as a “global cryptoasset hub.” However, they are currently trailing in the polls after a challenging campaign period. According to one prediction model by The Economist, the Tories have less than a 1% chance of winning the election on July 4.
With Labour leading in the polls and potentially set to take power, businesses in the crypto industry are now shifting their focus to wooing the opposition party. There have already been indications of progress in this area. In January, before the election campaign began, shadow chancellor Rachel Reeves, who would become finance minister if Labour wins, attended a breakfast event in Davos hosted by Coinbase.
Following the commencement of the race for Number 10, Coinbase intensified its efforts by introducing its Stand With Crypto campaign to the UK. Originating as an American initiative aimed at mobilizing the crypto community to actively participate in legislative processes, the campaign debuted with a high-profile launch event at the House of Commons last month. Government ministers and senior members of the Labour party, poised to potentially take over from the current administration, were among the attendees.
Following the launch of the Stand With Crypto campaign in the UK, Coinbase has presented a seven-point plan, dubbed as a “manifesto,” aimed at positioning the UK as a global leader in fintech, digital assets, and tokenization. Key policy recommendations for the next government include:
Updating Britain’s legal frameworks to accommodate digital assets
Attracting fintech, Web3, and crypto firms to conduct business in Britain.
Establishing a comprehensive regulatory framework for crypto assets.
Providing regulatory clarity on staking.
Exploring the potential of decentralization to revolutionize the economy.
Encouraging all government departments to adopt blockchain technology to enhance public services’ efficiency.
Launching a tokenization strategy for the City of London.
The U.S.-based Crypto Council for Innovation and other groups are pushing for clarity on existing regulations that have proven difficult to implement, along with a pathway to a more comprehensive regulatory framework.
These ambitions are ambitious, but it remains uncertain how much of a priority they would be for Sir Keir Starmer if he becomes the next Prime Minister, as predicted. Starmer recently outlined his immediate priorities, which include enforcing stringent spending regulations, establishing a state-owned energy company, reducing health service waiting lists, cracking down on smuggling networks, and increasing the number of police officers and teachers.
Many in the crypto community are concerned about potential reversals of favorable policies under a new Labour government in Britain. With the Conservative stablecoin legislation now on hold due to the upcoming election, there is uncertainty whether it will be permanently scrapped under new management.
However, the Crypto Council for Innovation remains optimistic. They believe Sir Keir Starmer is a thoughtful and focused leader unlikely to dismantle crypto-friendly measures introduced by the Conservatives. They argue that significant legislation related to stablecoins and other crypto matters will likely continue, emphasizing the independence of the Financial Conduct Authority (FCA) regardless of political changes.
The council sees the new government as an opportunity for the crypto sector, anticipating valuable engagements with newly elected MPs heading to Westminster. Nevertheless, with the Tories facing potential significant losses in Parliament, some of the crypto industry’s staunchest allies in London could find themselves out of office.
