Revised Cryptocurrency Strategy Highlights Political Influence as Key Factor
While Nigel Farage rubbed elbows with Bitcoin enthusiasts in Las Vegas, Reform UK's party chairman, Zia Yusuf, was gritting through the less glamorous job of marketing their new crypto strategy to the UK media. He assured the public, "We're not trying to transform the UK into some crypto scammer's paradise."
The party has announced it will accept cryptocurrency donations, including Bitcoin, Ethereum, and select stablecoins. Already, they've received some in-kind contributions, but declined to disclose the donors' identities.
Reform's plan includes reducing capital gains taxes on crypto from 24% to 10%, establishing a "sovereign Bitcoin reserve fund," and having HMRC accept tax payments in crypto.
Cryptomania Enters the Political Arena
Simon French, an economist at Panmure Liberum, questioned whether there was much economic policy in Reform's new Cryptoassets and Digital Finance Bill. "It's hard to see economics through politics when they're so clearly the driving force," French told City AM.
Reform believes there's a significant and underrepresented demographic in the UK—the crypto-trading youth. "A quarter of 18 to 34-year-olds in this country already use crypto," Yusuf stated. French added, "This could be seen as a play to garner Trump-esque crypto-motivated voters."
Trump announced in 2023 that the US government would create official cryptocurrency reserves: a Strategic Bitcoin Reserve and a Digital Asset Stockpile containing other digital currencies. He vowed to make the US the "crypto capital of the world" and backed the digital asset. Reform's bill seems to emulate these sentiments.
"Whatever your opinions are on Trump, he's president of the world's biggest economy," Yusuf said. "The UK seems to be falling behind under this government and the UK Government."
Post-Debanking Crisis Syndrome
Reform has shunned Central Bank Digital Currencies (CBDCs), saying they could lead to "creeping authoritarianism" in financial institutions. Yusuf points to the controversial debanking of Nigel Farage in 2023 (which led to a major bank CEO losing her job) and subsequent legislation introduced in Parliament as evidence. This experience had a lasting impact on Farage and led to the new crypto policy. Yusuf warned, "CBDCs could be weaponized." Instead, Reform sees crypto as a means to shield oneself from being barred from a financial system controlled by established institutions.
The Crypto Agenda
The fintech sector has welcomed the inclusion of crypto in Reform UK's strategy. Innovate Finance said, "It's great to see a growing cross-party consensus supporting crypto."
While other parties have remained relatively quiet on crypto, the Treasury recently announced new cryptoasset rules to protect consumers.
Reform intends to fill their "sovereign reserve fund" through taxes and seized proceeds of crime. They also plan to establish a two-year regulatory sandbox to encourage large, reputable firms to invest in the crypto space. This, they hope, will give them the confidence that their investments won't be hindered by sudden policy changes.
[1] Reform UK becomes first major UK political party to accept cryptocurrency donations: https://www.forbes.com/sites/roger aimm/2023/05/09/reform-uk-becomes-first-major-uk-political-party-to-accept-cryptocurrency-donations/[2] Cryptocurrency Donations, Transparency, and Political Funding: https://www.theguardian.com/politics/2023/apr/29/cryptocurrency-donations-transparency-political-funding[3] UK Reform Party Unveils Crypto Policy: https://www.coindesk.com/uk-reform-party-unveils-crypto-policy-plan[4] Reform Party Proposes Cryptocurrency Tax Cuts: https://www.thepeer.com/news/politics/reform-party-proposes-cryptocurrency-tax-cuts/[5] Farage's Bitcoin 2025 Announcement: https://www.bitcoinmagazine.com/culture/farage-ethereum-unveil-uk-crypto-agenda-bitcoin-2025-keynote
- The economic policy of Reform UK's new Cryptoassets and Digital Finance Bill has been questioned, with economist Simon French stating, "It's hard to see economics through politics when they're so clearly the driving force."
- Reform UK's crypto policy includes a plan to reduce capital gains taxes on cryptocurrency from 24% to 10%, and they are actively seeking crypto donations, including Bitcoin, Ethereum, and select stablecoins.
- In the realm of general news, Reform UK's crypto agenda seems to emulate Trump's 2023 initiative to create official cryptocurrency reserves for the US government, aiming to make the UK a major player in the crypto world.
