Crypto Policy: A Missed Opportunity in UK Elections

As the U.S. presidential election sees crypto policy emerging as a key battleground, the UK general election paints a contrasting picture with no major political party addressing the crypto industry in their manifestos. Last week, the two leading political parties in the UK unveiled their visions for the future, spanning a collective 222 pages without a single mention of crypto, blockchain, or CBDCs. Expanding the scope to include the three largest alternative political parties reveals a lone stance by Reform UK, which pledges to oppose the creation of CBDCs.

“The absence of clear [crypto] guidelines within their manifestos is a significant missed opportunity,” said Conrad Young, co-founder of UK lobbying firm Athena Technologies. With approximately 10% of UK adults owning cryptocurrencies, there is a notable demographic potentially swayed by positive crypto policies.

In contrast, other policies such as Labour’s proposed 20% VAT on private schools—affecting merely 7% of British pupils—have ignited considerable debate and coverage. This disparity in policy attention raises the question: why is crypto being overlooked?

According to Athena Technologies, the reasoning differs between the two major parties. The Conservative Party, currently in power, is focused on retaining its traditional voter base, who are perceived as being generally skeptical of crypto. Labour, on the other hand, leads significantly in the polls and is adopting a “low-info strategy” to avoid jeopardizing this lead with potentially controversial policies, including those related to crypto.

Both parties discuss investing in “technology” to bolster the workforce, yet they deliberately avoid using any crypto-specific terminology. CryptoUK, a British lobbying group, views this as an oversight. “The crypto sector powers hundreds of businesses and thousands of jobs throughout the country,” a spokesperson from CryptoUK emphasized. Supporting crypto, they argue, could further job creation and economic growth in the UK.

The U.S. presents a starkly different scenario where crypto policy is actively debated, influenced perhaps by the higher proportion of Americans owning crypto—around 40%, and its integration into the mainstream financial system, evidenced by the approval of spot Bitcoin and Ethereum ETFs.

Meanwhile, the London Stock Exchange is introducing crypto ETPs, a move still on the fringe of UK finance. “It simply seems less controversial [in the UK] because we’re earlier on in the process of integrating it with our society,” Young elaborated.

Despite previous promises by Prime Minister Rishi Sunak to position the UK as a global hub for crypto technologies, these ambitions have not been evident in the current election campaign. Brett Hillis of Reed Smith noted that, unlike in the U.S., crypto regulation in Europe is not a major political issue, with a broad consensus existing on the regulation of digital assets.

Jon Helgi Egilsson, former chairman of the Icelandic Central Bank, attributed the UK’s reticence to the leading role played by the Bank of England and the European Central Bank in shaping crypto policies. This technocratic approach may explain why UK politicians defer to their central bank’s authority, awaiting clearer guidance before crafting their own crypto policies.

The omission of crypto from the UK political discourse during the election suggests a cautious approach, contrasting sharply with the U.S. where crypto has become a significant electoral issue. As the UK continues to navigate its financial future, the evolving landscape of global crypto policy will likely influence future political debates.