decrypt.co
Crypto is a key battle ground in the U.S. presidential election. But as the UK general election heats up, no major political party has taken a stance on the industry.
Last week, the two major political parties in the UK published manifestos outlining their vision of the future. Across the combined 222 pages, there was not a single mention of crypto, blockchain, or CBDCs. In fact, broadening the search to include the three largest alternative UK political parties there is only one mention of these terms—Reform UK pledging to oppose the creation of CBDCs.
“The absence of clear [crypto] guidelines within their manifestos is a significant missed opportunity,” co-founder of UK lobbying firm of Athena Technologies, Conrad Young, told Decrypt. “Around 10% of UK adults own cryptocurrencies, there is a substantial demographic that is directly affected by crypto policies who could be swayed by a positive stance on the subject.”
To put this in perspective, Labour proposed a 20% VAT on private schools which will only affect 7% of British pupils, according to the UK government website. Even so, it has been a hotly contested policy sparking outrage in British papers.
If the size of impacted voters isn’t the issue, then why omit crypto? According to Athena Technologies, the reason differs for the two leading parties.
For the party currently in power, the Conservatives, they are “on the defensive,” Young suggests. As a result, they aren’t focusing on revolutionary policies but instead “retaining support from older voters,” a group the firm believes is “traditionally crypto-skeptic.”
As for Labour, the party seeking to take power, they have campaigned using a “low-info strategy,” the firm explained—this is because they are significantly ahead in the polls and want to prevent damaging this lead. In turn, the party is attempting to avoid any controversial policies that can be easily weaponized and crypto is one of those, the lobbyist group said.
Both the Conservative and Labour manifestos talk about investing in “technology” to bolster the workforce, all while avoiding any crypto terminology. British lobbying group CryptoUK believes that this is an oversight.
“The crypto sector powers hundreds of businesses and thousands of jobs throughout the country.” a spokesperson from CryptoUK told Decrypt, “If politicians want more jobs and growth for the UK, they should be supporting crypto.”
Across the ocean
When we look across the Atlantic to the U.S., we see a political landscape much more concerned with crypto policy. This may be, in part, due to a larger share of Americans owning crypto—about 40%, according to a Security.org report. There’s also the fact that crypto has started to be integrated into the traditional financial system in the U.S., with the passing of spot Bitcoin and Ethereum ETFs.
The London Stock Exchange is currently in the process of launching crypto exchange-traded products (ETPs). This will see Bitcoin and Ethereum ETPs launched through WisdomTree and 21Shares. But, for now, crypto remains on the fringes of UK finance.
“I think it simply seems less controversial [in the UK] because we’re earlier on in the process of integrating it with our society,” Young explained. “Crypto has a much larger presence in American lives and media so it’s bound to be more controversial by virtue of this.”
While this is true, Rishi Sunak, the current British Prime Minister and former chancellor of the exchequer, previously pledged in 2022 to make the UK a “global hub for cryptoasset technology.” (A year later, in 2023, he made similar promises about turning the UK into a hub for artificial intelligence.) But now, nearly two years into his tenure and amid an election campaign, his crypto goal appears to have fallen to the wayside.
“If anything, the politicization of crypto in the U.S. is the exception rather than the rule. In other parts of the world, like Europe, crypto regulation is not a big issue politically,” Brett Hillis, Partner at law firm Reed Smith, told Decrypt. “There has been a broad consensus about the regulation of digital assets and existing laws have been relatively easy to amend to deal with this.”
Hillis has worked for Reed Smith’s dedicated crypto and digital asset practice, OnChain. In this role, he advised crypto companies on applying for registration with the FCA, helped with the structuring of exchange-traded products relating to cryptocurrencies, and guided regulatory treatment of initial coin offerings.
This could be due to the authority of the Bank of England, according to Jon Helgi Egilsson, the former chairman of the supervisory board of the Icelandic Central Bank and co-founder of Monerium.
“The absence of cryptocurrencies and CBDCs in UK political party manifestos can be attributed to the leading role of the Bank of England and European Central Bank in driving the conversation.” Egilsson told Decrypt, “This technocratic approach has overshadowed the involvement of elected officials in shaping the future of money.”
The Bank of England suggests appropriate regulations, much like the role of the Federal Reserve in the states. For example, earlier this year, the institution published a paper on CBDCs setting out its future vision for the technology.
“Why are political parties letting the Bank of England and civil servants lead the conversation? This is hard to say.” Egilsson continued, “It is possible that UK politicians have a greater respect for the authority of their central bank compared to Americans, leading them to await clearer guidance from the Bank of England before forming their own policies on CBDCs and cryptocurrencies.”
Edited by Stacy Elliott.