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UK General Election: Here’s What the Main Parties Have to Say About Crypto

Last Updated May 23, 2024 3:12 PM
Eddie Mitchell
Last Updated May 23, 2024 3:12 PM
Key Takeaways
  • Cryptocurrency regulations are unlikely to be a campaign issue in the 2024 general election race.
  • Nonetheless, Labour has pledged to make the UK a securities tokenization hub.
  • The Liberal Democrats, Greens, and others lack crypto policies or pledges in their manifestos.

Rishi Sunak has called a general election for July 4, 2024. With a date officially set, the future of crypto in the UK has once again been called into question.

As a global financial and business hub the UK has the potential to be a leader in crypto and blockchain technologies – do the other political parties think so too?

The Conservatives on Crypto

Having an economist and innovation advocate such as Rishi Sunak in N0.10 should have been a boost to the UK’s crypto scene. But with priority legislature struggling to pass through parliament, cryptocurrency has not been a top priority for the UK’s conservative party.

Nonetheless, the Conservatives did manage to introduce several bills that bring crypto under regulation. These have largely been safety and security-centric, granting authorities greater powers to supervise, monitor, seize, and prosecute crypto activity.

Conservative Economic Secretary, Bim Afolami, spent some months talking up the prospect of stablecoin and staking regulations being implemented by July 2024. This may now be unlikely as MPs work to pass any remaining legislature through parliament by May 31, 2024. After that, the current parliament will be dissolved.

There’s a slim chance that the Conservatives will make crypto part of their campaigning message, but another term in office would force a cabinet reshuffle, and therefore a reordering of legislative priorities.

Labour Eyes Tokenization

The Labour Party has some plans for crypto and blockchain technologies, with a particular focus on the “tokenization” aspect of the technology, writing :

“Tokenization, which U.K. Finance defines as ‘the digital representation of financial assets using distributed ledger technology,’ presents a significant new opportunity for the U.K.,”

The document, introduced by Labour’s Shadow Chancellor Rachel Reeves, and Tulip Siddiq, Shadow Economic Secretary to the Treasury, also outlined its intentions to make the UK a global securities tokenization hub.

“A Labour government will also look to develop partnerships with other financial centres to establish interoperable standards and enable trade of tokenised assets across borders.”

Furthermore, they intend to leverage the latest technologies such as Artificial Intelligence (AI) and others to deliver “the next phase of Open Banking” and define a roadmap for the future of “Open Finance”.

This includes “embracing”  securities tokenization, CBDCs, and creating more regulatory sandboxes for financial products “to reach underserved communities.”

It’s an angle not too dissimilar from that of the Conservative’s “crypto hub” ambitions. However, the focus on the tokenization of securities, and their use in cross-border trade, may prove fruitful for crypto regulatory clarity  in the UK.

Liberal Democrats Lack Vision

Across the Liberal Democrats’ manifesto, there is no mention of digital assets or cryptocurrency.

But it is worth noting that historically, the Liberal Democrats have been a party that attracts a younger, left-leaning and progressive voting demographic. A 2021 study  showed that 29 percent of LibDem voters held crypto.

At that time, Liberal Democrat spokesperson for Treasury and Business & Industrial Strategy, Sarah Olney, espoused some support of crypto, telling  City A.M in 2021:

“In today’s increasingly digital world people have so many opportunities to make the most of new technologies – and cryptocurrencies are an example of that,”

She also noted in the 2021 report that she has urged the government to make blockchain technology more climate-friendly.

Unfortunately for them, over the last 10 years or so, they have lost  that demographic to both the Labour and Conservative parties, who are now most attractive to voters aged 18 to 24.

The Uphill Battle

As for the other parties such as the Green Party, and the newly established tory-rebel group Reform UK, crypto is an afterthought. Nonetheless, efforts to create a central bank digital currency (CBDC) by the Bank of England (BoE) remain ongoing  and somewhat unaffected by the state of the government.

There is also plenty of crypto and blockchain innovation within regulatory sandboxes, led by industry bodies nad major institutions. One such program is testing tokenized bank deposits and has participation from some of the largest financial entities in the UK.

Through various pieces of legislation, the UK has had some success in curbing the use of crypto in fraud, money laundering, and other illicit activities. But this has had negative impacts for retail users. Notably, it has resulted in banks preventing customers from interacting with crypto services such as exchanges.

This also comes at the detriment of the UK’s crypto sector, which is struggling to gain traction with retail customers and investors due to the somewhat overly cautious approach to regulating crypto in the UK.

It’s safe to say that crypto innovation is expected to continue regardless of the election’s outcome. But it is unlikely that crypto will be a priority regardless of who wins, at least for the foreseeable future.

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