Radhika Parashar
- The UK is gradually adding layers of regulations to its crypto ecosystem
- Recently, the UK government has mandated crypto firms to collect transaction data of users
- The country may finalise its comprehensive rules by 2026
UK’s Cabinet Office minister Pat McFadden has advocated for a ban on crypto donations for electoral support and political campaigns. McFadden put his opinion forward during a joint meeting of the House of Commons and the Lords Committee on the national security strategy held this week.
Transactions processed via cryptocurrencies are largely anonymous and can be completed without the involvement of a bank or an intermediary. Owing to this, several nations have repeatedly raised concerns regarding their potential use in facilitating illicit activities such as money laundering and terror financing.
As reported by The Guardian this week, McFadden said it is critical for governments to identify the sources of political and verify the compliant statuses of the donating entities to assess the bona fides of that donation and possible consequences of accepting the financial aid.
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The minister’s comments comes a couple of months after a Reform UK Party leader Nigel Farage said it would follow US President Donald Trump to accept BTC donations for electoral campaigns.
This could be a topic of discussion in the UK as the Financial Conduct Authority (FCA) there is eyeing the year of 2026 to finalise a national crypto policy framework by, Bloomberg had reported in November 2024.
Meanwhile, in recent years, the UK has taken some concrete steps aiming to position itself as a lucrative location for crypto expansion. If crypto companies were to flock to the UK and set up shop, His Majesty’s Treasury would subsequently see an increase in funds.
Among recent developments, the UK government has mandated registered crypto-linked firms to collect the crypto transaction data. The authorities have also directed crypto businesses to maintain legal business names, registered corporate addresses, as well as company registration numbers.
The Bank of England has also instructed UK-based firms to disclose their crypto exposure status for a thorough analysis of merging crypto with traditional finance.
