Reform’s new crypto plan: politics ‘the driving force’
While Reform UK leader Nigel Farage was busy wooing the Bitcoin aficionados in Sin City, Las Vegas, party chairman Zia Yusuf faced the much less glamorous task of selling the UK media their new crypto plan.
“This is not about turning the UK into some alt-coin scammers paradise,” Yusuf said.
This follows the Reform party’s announcement that they are inviting donations in the form of cryptocurrency: Bitcoin, Ethereum, and some select stablecoins.
The party has already seen some donations in kind come in, though denied to comment on the donors’ identities.
Reform’s new plan involves cutting down capital gains taxes on crypto from 24 per cent to 10 per cent, establishing a “sovereign Bitcoin reserve fund,” and making HMRC accept tax payments by way of crypto.
Trumpian cryptonomics
Simon French, economist at Panmure Liberum – who can also be credited with a critique of Reform’s economic policies – said there wasn’t much economic policy to be found in Reform’s new Cryptoassets and Digital Finance Bill.
“It is hard to see through an economic lens when the politics is so obviously the driving force,” French told City PM.
Reform considers there to be a significant and underserved demographic in the UK – the crypto-trading young. “A quarter of 18 to 34 year olds in this country already use crypto,” Yusuf said.
“This should be seen through the lens of Trump garnering a lot of crypto-motivated voters – where 18–34-year-olds with exposure would yearn for state-backed asset appreciation,” French added.
President Donald Trump announced that the US government will create official cryptocurrency reserves: a Strategic Bitcoin Reserve and a Digital Asset Stockpile comprising other digital currencies.
Trump pledged to make the US “the crypto capital of the world” and threw his weight behind the digital asset.
Reform’s bill follows in tow.
“Whatever your views are on President Trump, he is president of the mightiest economy in the world, and where the United States goes, generally, the world follows,” Yusuf said.
“I don’t think people necessarily realize the speed at which the UK economy is being left behind, under – firstly – the Tory government, and now the UK Government.”
Post-Debanking Stress Disorder
Reform will not be putting their weight behind Central Bank Digital Currencies (CBDCs) as “it opens the door to … this creeping authoritarianism that’s been happening inside financial institutions, has been exerted via financial institutions,” Yusuf said.
Yusuf is referring to the debanking of controversial individuals – most notably, their own Nigel Farage.
Though his debanking in 2023 led to a major bank chief losing her job, and new legislation being introduced in parliament, it appears the experience left an indelible mark on Farage.
The debanking scandal directly informed the new crypto policy. Yusuf said: “Nigel was treated appallingly by his bank, literally because of his political views… if you are debanked and unable to access financial services, it’s not a great life. You’re effectively unpersoned.”
Reform are concerned that CBDCs might be “weaponised.” The party sees crypto as the magic bullet to arm oneself against being locked out of a financial system that is run by established and entrenched institutions.
The crypto plan
The inclusion of crypto as a high-profile component of a political party’s strategy was well-received in the fin-tech space.
“It is good to see that political parties across the UK are looking at cryptoassets as an opportunity for UK growth.
“This is critical to international competitiveness and growth and it’s great to see a growing cross-party consensus supporting this,” Innovate Finance said.
The other parties have refrained from being particularly vocal about crypto, though last month the Treasury announced new cryptoasset rules to protect consumers.
Reform’s proposed method of filling the sovereign reserve fund is through taxes and seized proceeds of crime.
Reform also plan to introduce a two-year regulatory sandbox to get “large, reputable firms to invest in the space in a compliant way,” and to “give them the confidence that in doing so, they’re not going to then get kneecapped by complete change in direction.”