Reform UK will start accepting donations in cryptocurrency, making it the “first” British party to do so, its leader Nigel Farage has said – but the move has sparked concern from some experts.
The announcement came as Mr Farage spoke at a Bitcoin Conference in Las Vegas on Thursday, and as his party pledged to cut taxes on cryptocurrencies if elected.
“My message to the British public, my message particularly to young people, is help us to help you bring our country properly into the 21st century,” he said.
“Let’s recognise that crypto, Bitcoin, digital assets, are here to stay.”
The MP for Clacton also introduced a ‘Cryptoassets and Digital Finance Bill’ – which he described as a “bold, post-Brexit roadmap” to make London a “world-leading trading centre”.
However, experts have warned against the idea of allowing political donations to be made via cryptocurrency.
Financial crime expert Steve Goodrich told Politico’s Playbook: “The anonymity offered by digital currencies makes it nearly impossible for political parties to have confidence in their donors’ identities.
He added that the growth of crypto threatens a “widening loophole that could allow unlimited anonymous donations to flow into British politics.”
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Donald Trump, who called Bitcoin a “scam” in 2021, changed course before the presidential election last year – and ended up receiving millions in donations from deep-pocketed investors.
Mr Farage appears to be following the same playbook, and has pledged to create a “sovereign Bitcoin reserve fund” so taxpayers can benefit if this cryptocurrency’s price rises.
The Trump administration unveiled a similar policy in March – meaning Bitcoin seized from criminals would no longer be auctioned off, but held in case its value grows.
Data from Arkham Intelligence shows the UK currently holds £4.7bn worth of Bitcoin – but Labour has ruled out treating it as an investment, arguing that this asset is too volatile.
The government is yet to sell off these crypto holdings, despite the fact that it could comfortably pay for a U-turn on winter fuel payments – with plenty of change left over.
Mr Farage announced his policy at the Bitcoin conference in Las Vegas.
Pro-Bitcoin policies are unlikely to be front of mind for many British voters, who are still grappling with a cost-of-living crisis.
But Reform’s stance marks another point of difference from both Labour and the Conservatives, who are yet to take a definitive stance on crypto.
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It came as Reform chairman Zia Yusuf told reporters on Friday that if the party were elected to government, the party would allow people to pay their taxes through Bitcoin.
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He also said Reform would reduce capital gains tax on assets like Bitcoin to 10% – with the hope of generating up to £1bn for the Treasury in 10 years.
Currently, cryptocurrencies incur a capital gains tax of either 18% or 24%.
He added that the cut may encourage additional use of the currency, and encourage people to move their assets to Britain.
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Cryptocurrencies – like Bitcoin – have become increasingly popular over recent years, with research suggesting that around 12% of adults in the UK currently, or once, owned cryptoassets – compared to 4% in 2021.
Last month, the chancellor announced plans to regulate cryptoassets in order to make Britain a “world leader”.
