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Two nights before Prime Minister Rishi Sunak surprised the UK by calling a snap election, crypto executives were sipping wine and eating canapes on a House of Commons terrace, part of a months-long bid to build stronger links with British lawmakers and power brokers.\u00a0<\/p>\n
The event was organized by US-based crypto exchange Coinbase Global Inc. and its adviser, former Conservative Chancellor of the Exchequer George Osborne. But while senior members of both of Britain\u2019s two dominant political parties were there, the influence campaign had increasingly targeted Labour, given its large and consistent lead in polls.\u00a0<\/p>\n
Sunak\u2019s decision to call a July 4 election validated that approach, but it also underscored the sense of uncertainty hanging over crypto in the UK. Labour hasn\u2019t been in power since 2010, when Bitcoin was worth less than a dollar. And its leader, Keir Starmer, has been mostly silent on cryptocurrencies.\u00a0<\/p>\n
\u201cEveryone is trying to guess,\u201d what Starmer intends to do in crypto regulation should Labour win, said Laura Navaratnam, UK policy lead at the Crypto Council for Innovation. \u201cPart of the answer here is quite possibly that Labour don\u2019t know what they think yet.\u201d<\/p>\n
In what\u2019s arguably the most important electoral cycle ever for crypto, both the UK and US are choosing their leaders in a span of just four months. Since the last time the two countries went to the polls, the industry has weathered a brutal market slump and its toughest regulatory crackdown.\u00a0<\/p>\n
But the past year brought a stunning recovery, capped by the approval of exchange-traded products linked to Bitcoin and Ether on both sides of the Atlantic. In the US, the industry is\u00a0ramping up donations<\/a>\u00a0to crypto-friendly candidates to keep the momentum going. In the UK, it has focused on sidling up to Starmer and the party he leads.\u00a0<\/p>\n The UK is Coinbase\u2019s second-largest market, yet many in the industry view the country as a laggard in crypto regulation. That\u2019s in spite of a 2022 pledge by Sunak himself, shortly before he became prime minister, to make the country a key hub for the sector. Since then, the European Union (from which the UK voted in 2016 to part ways) has adopted sweeping crypto legislation, and rival financial centers like Hong Kong and Dubai have introduced new regulations.\u00a0<\/p>\n By contrast, the UK mostly relies on a patchwork of crypto rules mainly enforced by the Financial Conduct Authority. Plans laid out by the Treasury in February last year call for digital assets to be regulated similarly to traditional financial services.\u00a0<\/p>\n The FCA is expected to publish a first draft of its proposed crypto licensing regime before the end of the year, according to two people familiar with the matter. The regulator declined to comment.\u00a0<\/p>\n Here\u2019s crypto\u2019s UK wish list:<\/strong><\/p>\n A Conservative government proposal to introduce secondary legislation around stablecoins \u2014 crypto tokens that are typically pegged to a currency like the dollar \u2014 failed to come to a vote before parliament was dissolved ahead of the election. It\u2019s unclear how quickly it might reappear on the agenda under a Labour regime.\u00a0<\/p>\n With Labour consistently polling far ahead of the Tories since Liz Truss\u2019s tumultuous and short-lived reign as prime minister last fall, the crypto lobby has been preparing for a changing of the political guard.\u00a0<\/p>\n In October, trade group CryptoUK held its first event attached to the annual Labour Conference in Liverpool. When Coinbase launched the Stand With Crypto lobbying program in the UK two months later, it did so in Manchester, a traditional Labour stronghold. \u00a0<\/p>\n \u201cWe\u2019re fearful that if the government delays too long in getting a full regulatory package in place, we\u2019re going to be way behind our competitors,\u201d said CryptoUK board advisor Ian Taylor. A Labour win could usher in \u201ca demographic shift that will hopefully want to engage with our sector,\u201d he added.\u00a0<\/p>\n With Starmer seemingly less concerned with digital assets, crypto executives have turned their attention to Rachel Reeves, Labour\u2019s shadow chancellor, and Shadow City Minister Tulip Siddiq. In the event of a Labour win, it is likely those two who will oversee efforts to rehabilitate London\u2019s status as a global financial center after Brexit.\u00a0<\/p>\n Coinbase hosted a breakfast roundtable with Reeves at the World Economic Forum in January. Executives including venture capital firm Andreessen Horowitz\u2019s UK General Partner Sriram Krishnan and Stripe co-founder John Collison were also in attendance.\u00a0<\/p>\n Andreessen Horowitz, also known by its a16z moniker, is among the biggest VC backers of crypto startups. Stripe announced in April that it\u2019s bringing back\u00a0crypto payments<\/a>\u00a0to its platform.\u00a0<\/p>\n The next Labour government will work with the tech sector to bring jobs and prosperity to Britain.<\/p>\n Thank you to @sriramk<\/a> for organising and @coinbase<\/a> for hosting breakfast this morning. pic.twitter.com\/xCxYXg3Ysf<\/a><\/p>\n\n\n\n
\n \u2013 Quickly introduce a comprehensive suite of crypto regulations<\/td>\n<\/tr>\n \n \u2013 Reintroduce stablecoin legislation proposal<\/td>\n<\/tr>\n \n \u2013 Loosen restrictions on marketing of crypto products<\/td>\n<\/tr>\n \n \u2013 Address difficulties getting banking access\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n Reeves, Siddiq<\/h2>\n
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