How will UK crypto policies change under the Labour government?
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How will UK crypto policies change under the Labour government?
The Labour Party won the House of Commons election by a landslide, leaving once again unresolved the question of Britain's crypto trajectory and the former prime minister's promise to build a "global cryptocurrency hub."
Navigating Web3 tides with focused insightsAuthor: Mia, ChainCatcher
Editor: Marco, ChainCatcher
On July 4, the UK general election concluded with a landslide victory for the Labour Party, which secured 412 seats in the House of Commons. Party leader Keir Starmer has moved into 10 Downing Street. This marks the most one-sided electoral win in Labour's history, ending 14 years of Conservative rule and undoubtedly bringing significant changes to the UK's political landscape—leaving both domestic and international observers with many unanswered questions.
Former Prime Minister Rishi Sunak had called for cryptocurrency to be part of his policy agenda and pledged that the UK would embrace crypto technology, aiming to become a "global crypto hub." Will the new government continue these existing policies and support innovation and growth in the crypto industry?
Currently, the Labour Party has remained tight-lipped about how the Starmer-led government will regulate and foster growth in the sector, leaving the future of cryptocurrency, blockchain, and related verticals in digital assets full of uncertainty.
The New UK Government’s Stance on Crypto
As a traditional global financial center, the City of London has long served as a bellwether for the international finance industry—and the same holds true for the crypto sector.
Even before the Conservatives left office, the UK government under former Prime Minister Sunak expressed ambitions for the country to become a crypto hub and launched consultations on future plans, including regulations for stablecoins. Additionally, outgoing Treasury Economic Secretary Bim Afolami attended multiple fintech conferences and committed that the government would introduce secondary legislation for stablecoins.
In contrast to the Conservatives, who ruled for 14 years and maintained a relatively clear stance on cryptocurrency, the newly elected Labour Party has focused primarily on economic recovery, policing, and the National Health Service (NHS).
Although Prime Minister Starmer's personal views on crypto remain somewhat ambiguous, his shadow chancellor Rachel Reeves—who is expected to take over as Chancellor of the Exchequer—has shown openness toward the tech industry.
Shadow Cabinet member Tulip Siddiq stated: "If Labour wins, we will transform the UK into a global center for tokenized assets."
Moreover, Labour has publicly expressed support for the Bank of England's digital pound initiative.
Nigel Green, CEO of financial services giant DeVere Group, said, "The foundation for making the UK a global crypto hub lies in establishing a clear and comprehensive regulatory framework. London has always been a leading global financial center. By embracing cryptocurrency and blockchain technology, Starmer can elevate London’s status. Combining London’s robust financial infrastructure with progressive crypto regulation could attract international businesses and investors."
Uncertainty Over the UK Government’s Next Steps on Crypto Policy
In January this year, the UK Labour Party released a financial services plan that included making the UK a center for security tokenization by "advancing work on clarifying laws related to tokenization." While the document did not explicitly mention terms like "cryptocurrency" or "blockchain," it did state that "embracing security tokenization and central bank digital currencies" is part of the party's vision for the UK.
Brian Rose, founder of the Cryptocurrency & DeFi Academy, found the incoming Chancellor Rachel Reeves’ openness toward the tech sector encouraging. However, he added, "There are rumors that Labour plans to address security tokenization and issue a CBDC as part of its financial policy, which raises concerns. I hope she collaborates with the crypto community to develop market-leading policies rather than rolling out poorly conceived initiatives without consultation."
Regarding Labour’s rise to power, members of the UK crypto community say there is still more work to be done, including enacting key regulations identified by the previous government.
Jordan Wain, Head of Policy at Chainalysis UK, remains optimistic and does not believe the change in government will derail the UK’s prior progress on crypto. "A lot of truly important groundwork has already been completed—not by the political parties themselves, but by the Financial Conduct Authority (FCA), who are the ones actually drafting the rules. They won’t throw away all that hard work; it won’t go to waste."
Bivu Das, Managing Director of Kraken UK, shares a similar view, stating: "Clearly, the UK’s political landscape has shifted, but when it comes to crypto, we expect business as usual. The new government now has an opportunity to keep driving innovation and growth in this emerging asset class and solidify the UK’s position as a leading jurisdiction for blockchain innovation."
Keld van Schreven, Co-Founder of UK-based digital asset investment firm KR1, believes this transition between parties comes at a "critical moment" for the crypto industry. "Significant progress has already been made in developing a regulatory framework, but more work is needed for the UK to become a true global crypto hub."
Additionally, the UK crypto advocacy group CryptoUK says it has already established contact with members of the Labour government and is calling on Labour to prioritize clear and constructive policymaking to fully unlock the potential of the crypto industry.
Most crypto experts agree that despite the political shift, progress in the UK’s cryptocurrency and blockchain sectors will not be halted—and may even accelerate under the new administration. While Labour’s openness to the tech sector is welcomed, concerns remain about the specifics of policy implementation.
Prior to the election, the UK government was expected to roll out a regulatory framework for cryptocurrencies and payment stablecoins in July. However, due to the post-election parliamentary recess, most experts believe this timeline may now be delayed.
At present, the Labour Party has not made any major decisions regarding the future of cryptocurrency, nor has it taken a firm stance on blockchain and related technologies.
Crypto Is Becoming an Increasingly Important Issue in Elections
From the approval of spot BTC ETFs to the implementation of regional crypto regulations, the crypto industry continues to mature. Cryptocurrencies are gradually entering the public consciousness and influencing the global economy, and "attitudes toward crypto" are increasingly becoming a bargaining chip in international politics.
In the upcoming 2024 US presidential election, the role of crypto assets has undergone a dramatic transformation—from initial resistance during Trump’s early presidency to Trump himself now openly supporting digital assets. This shift not only highlights how crypto has evolved from being "ignored" to "actively engaged" on the global political stage, but also reflects the growing significance of the sector in shaping public discourse in the United States. The rising prominence of crypto in electoral competition stems precisely from its increasing relevance to public concerns.
This evolution has profoundly influenced the policy positions of President Biden and his administration. The Biden government has begun showing greater affinity toward crypto assets, not only acknowledging their potential value within the economic system but also publicly expressing openness to crypto donations. This shift undoubtedly paves the way for deeper integration of cryptocurrencies into America’s political and economic fabric.
Michael Novogratz, founder of Galaxy Digital, commented: "Growing acceptance of cryptocurrency in politics means that, in the long run, it might not matter who wins."
Earlier, in response to the US SEC’s recent softer approach in the crypto space, Hong Kong-based blockchain lawyer Jason Wu noted, "There are signs that the SEC’s regulatory stance may be shifting." Regarding the UK Labour Party’s rise to power, Wu also maintains an optimistic outlook. He expects that "the stablecoin and tokenization regulations proposed during the Conservative tenure could still move forward in the future, though the exact timeline remains uncertain."
Wu told ChainCatcher that the UK’s regulatory approach toward the crypto industry has indeed been quite strict over the past year—"including the promotional rules announced last October, which led several exchanges such as Bybit and Binance to exit the UK market. Apple’s App Store also required crypto-related apps to be removed from the UK."
On the regulatory approval process, Wu pointed out that the UK’s Financial Conduct Authority (FCA) has been inefficient and slow in reviewing applications from crypto firms. This situation undoubtedly increases the difficulty and uncertainty for new entrants, posing certain obstacles to the healthy development of the industry. He added, "I hope the Labour government can ease the current overly cautious and stringent attitude toward the crypto sector, allowing the industry to develop normally."
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