Is Crypto in Trouble After the Conservative Party’s Defeat in Britain?
The UK’s recent general election on July 4th saw a surprising victory for the Labour Party, potentially ending the Conservative Party’s 14-year rule. Exit polls suggest that Labour is projected to win 410 seats, positioning Keir Starmer as the next UK Prime Minister. This political shift raises concerns about the future of cryptocurrency regulations in the country.
The exit poll conducted by the BBC at various polling stations across England, Scotland, and Wales showed Labour’s strong performance. The official results confirmed Labour’s parliamentary majority, with the party winning a historic 412 seats.
However, the Labour Party’s victory casts uncertainty over the future of crypto regulation in the UK. Some crypto-friendly Conservative MPs, such as Lisa Cameron, did not participate in the election, signaling a possible change in policy under Labour’s administration.
Previously, the Conservative leadership had plans to establish a regulatory framework for cryptocurrencies and payment stablecoins by July. It remains uncertain if Labour will continue this initiative, as their overall stance on crypto is ambiguous, despite supporting ideas like securities tokenization and a central bank digital currency earlier this year.
Market participants are concerned about how the crypto industry will react to Labour’s victory. Rishi Sunak, during his tenure, had hinted at nurturing the UK as a global crypto hub. However, the timing of the general election, shifted from its scheduled window to July by Sunak, along with parliamentary recesses, could further delay the implementation of concrete crypto regulatory frameworks.
Nigel Green, CEO of deVere Group, expressed concerns about Labour’s unclear position on crypto. While Keir Starmer has not clarified his views, shadow chancellor Rachel Reeves appears somewhat receptive to the tech sector. Labour MP Tulip Siddiq mentioned that if they win the election, the party intends to position the UK as a global center for tokenized assets.
The Labour Party’s rise to power could lead to significant changes in the UK’s crypto landscape. The Conservative Party has played a crucial role in shaping current crypto policies since 2010, and a Labour government may re-evaluate these strategies, potentially introducing new regulations or reforms.
This shift in political power contrasts with trends in some of the UK’s closest allies. France’s far-right National Rally is gaining momentum, and in the US, Donald Trump is eyeing a political comeback. Labour’s approach to crypto regulation may be influenced by this broader geopolitical shift, especially as the party seeks to establish its stance on financial innovation.
Seamus Rocca, CEO of Xapo Bank, commented on the potential politicization of crypto in the UK, highlighting the demand for spot Bitcoin ETFs despite an anti-crypto regulatory climate. He emphasized the importance of the UK positioning itself as a hub for entrepreneurship, innovation, fintech, and crypto to stimulate job creation and industry growth.