The Conservatives, who have introduced a slew of pro-crypto policies in recent years, are expected to lose hundreds of seats when UK elections takes place on July 4.
Crypto has taken a prominent role in the U.S. presidential campaign โ with Donald Trump cozying up to Bitcoiners. But over in Britain, where voters head to the polls in a little over two weeksโ time, itโs fair to say digital assets havenโt been too much of a focus for the candidates.
You could argue that it should be. The latest data from the Financial Conduct Authority shows that 9% of U.K. adults owned crypto in August 2021. Thatโs equivalent to almost five million people โ and given the recent bull market, thereโs little doubt these numbers are soft.
However, we are seeing some gentle lobbying going on behind the scenes. Prime Minister Rishi Sunak and his governing Conservative Party have repeatedly spoken of their ambition for the U.K. to become a โglobal cryptoasset hubโ but are languishing behind in the polls after a torrid campaign. One prediction model put forward by The Economist suggests that the Tories have less than a 1% chance of being elected on July 4.
Because of this, businesses in the crypto industry are now trying to woo Labour, who are streets ahead in the polls and likely to clinch the keys to Downing Street. It appears some inroads have been made already, too. Back in January โ before the current campaign kicked off โ shadow chancellor Rachel Reeves (who would become finance minister if Labour wins) attended a breakfast in Davos that was hosted by Coinbase.
Once the starting gun was fired in the battle for Number 10, Coinbase doubled down by bringing its Stand With Crypto campaign to British shores. Initially launched as an American initiative that โmobilizes the crypto community to directly engage in the legislative process,โ a glitzy launch event was held in the House of Commons last month. It was attended by government ministers as well as senior members of the Labour team who want to replace them.
This has been followed up by a seven-point plan โ described as a โmanifestoโ โ that would help the U.K. become a global leader in fintech, digital assets, and tokenization. Key policy recommendations made for the next government include:
- Welcoming fintech, Web3 and crypto firms to do business in Britain
- Establishing a โcomprehensive regulatory frameworkโ for crypto assets
- Delivering regulatory clarity on staking
- Understanding how decentralization could revolutionize the economy
- Encouraging all departments to embrace blockchains and make public services more efficient
- Launching a tokenization strategy for the City of London
- Updating Britainโs legal frameworks for digital assets
Other groups, including the U.S.-based Crypto Council for Innovation, is seeking clarity on existing regulation that has proven โchallengingโ to implement for its members, as well as โa path to a broader regulatory regime.โ
Theyโre all certainly lofty ambitions โ but itโs unclear how much of a priority this would be for Sir Keir Starmer if, as predicted, he becomes the next Prime Minister. Last month, he stated that his most urgent โfirst stepsโ would include imposing strict spending rules, establishing a state-owned energy firm, slashing waiting lists for the health service, clamping down on smuggling gangs, and hiring more police officers and teachers.
Will recent policies be reversed?
A more pressing concern for many crypto investors and businesses in Britain is whether or not Labour would undo some of the friendlier policies that were introduced during Rishi Sunakโs time in office. While the Tories had promised to finalize stablecoin legislation before Parliament broke up for the summer, that proposal has now been put on ice because of the election. Will this be canceled for good under new management?ย
The Crypto Council for Innovation seems pretty relaxed about this. It said:
โStarmer appears to be a considered and focused leader who is not expected to unpick the Conservativesโ work on crypto simply on principle. This makes it more likely than not that large pieces of legislation like that related to stablecoins will be allowed to continue. Additionally, the FCA is independent and retains its staff irrespective of any change in government.โ
Crypto Council for Innovation
Striking an optimistic tone, the council argued that a new government amounts to โan opportunityโ for the crypto sector โ especially considering valuable contacts could be made among newly elected MPs heading to Westminster for the first time.
But with a bloodbath expected for the Tories โ who had 376 seats in 2019 and may be left with just 80 on polling day โ itโs also fair to say that some of the industryโs most dependable friends in London may be left unemployed.
