As UK elections loom, is crypto a priority for Labour?

The Conservatives, who have introduced a series of pro-crypto policies in recent years, are expected to lose hundreds of seats in the UK elections on July 4.

Cryptocurrency has taken on a prominent role in the US presidential campaign; Donald Trump is sympathetic to Bitcoin enthusiasts. But in Britain, where voters head to the polls in just over two weeks, it’s fair to say digital assets aren’t much of a focus for candidates.

You might argue that it should be so. The latest data from the Financial Conduct Authority shows that 9% of UK adults held cryptocurrency in August 2021. This is equivalent to almost five million people. And given the recent bull market, there’s little doubt these numbers are soft.

However, we see soft lobbying activities being carried out behind the scenes. Prime Minister Rishi Sunak and the ruling Conservative Party have repeatedly talked about the UK’s aim to become a “global crypto asset hub” but are trailing in the polls after a spirited campaign. A forecasting model by The Economist suggests the Conservative Party has less than a 1% chance of being elected on July 4th.

As such, businesses in the crypto industry are now trying to influence the Labor Party, which is ahead in the polls and will likely hold the keys to Downing Street. It seems that some progress has already been made. In January, before the current campaign began, shadow chancellor Rachel Reeves (who would become finance minister if Labor won) attended a breakfast in Davos 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. Originally launched as an American initiative “to mobilize the crypto community to get directly involved in the legislative process,” a splashy launch event was held in the House of Commons last month. The meeting was attended by government ministers as well as senior members of the Labor Party team seeking to replace them.

Source: Stand By Crypto UK

This was followed by a seven-point plan described as a “manifesto” that would help the UK become a global leader in fintech, digital assets and tokenisation. Key policy recommendations for the next government include:

Welcoming fintech, Web3 and crypto firms to do business in Britain Creating a “comprehensive regulatory framework” for crypto assets Providing regulatory clarity on staking Understanding how decentralization could revolutionize the economy Encouraging all departments to adopt blockchains and making public services more efficient A tokenisation Launching strategy Updating Britain’s legal frameworks for digital assets for the City of London

Other groups, including the US-based Crypto Innovation Council, are seeking clarity on a “pathway to a broader regulatory regime” alongside the current regulation, which has proven “challenging” for its members to implement.

These are all big goals for sure; but it is unclear how much of a priority this will be if Sir Keir Starmer becomes the next Prime Minister as predicted. Last month, he said his most immediate “first steps” would be to impose strict spending rules, set up a state-owned energy company, reduce waiting lists for health services, crack down on smuggling rings and hire more police officers and teachers.

Will recent policies be reversed?

A more pressing concern for many crypto investors and businesses in Britain is whether Labor will roll back some of the friendlier policies introduced during Rishi Sunak’s time in office. Although the Conservatives had promised to complete stablecoin legislation before Parliament adjourned for the summer, that proposal has now been shelved due to the election. Will this be completely canceled under the new administration?

The Crypto Innovation Council seems pretty relaxed about this. He said:

“Starmer appears to be a thoughtful and focused leader who is not expected to roll back the Conservatives’ work on crypto on principle. This raises the possibility that major pieces of legislation like this regarding stablecoins will be allowed to proceed. “In addition, the FCA is independent and protects its staff regardless of any change in government.”

Innovation Crypto Council

In an optimistic tone, the council argued that a new government represents “an opportunity” for the crypto industry; especially considering that valuable contacts can be made between newly elected MPs heading to Westminster for the first time.

But given the expected bloodbath for the Conservatives, who held 376 seats in 2019 and may have just 80 seats left on election day, it’s also fair to say that some of the industry’s most trusted friends in London could be out of a job.