It could be bad news for Reform UK as the Labour Government looks to outlaw political donations via cryptocurrency.
It could ban the digital currency from being donated to political parties (Image: Getty)
The government is considering placing a ban on any donations made in cryptocurrency to the UK’s political parties. Ministers are considering measures to stop the use of cryptocurrencies to fund political parties, according to recent discussions on Labour’s Elections Bill.
Nigel Farage’s party, Reform UK, was the first political party in Britain to accept donations in cryptocurrencies, including Bitcoin, earlier this year. Reform set up its own crypto donations portal and affirmed there would be enhanced measures to stop any misuse.
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Cryptocurrencies have risen in popularity in recent years, as digital tokens which don’t require a bank or financial institution to verify transactions. It uses specialised computer systems to keep the money secure, instead of centralised authority like the majority of UK banks. Crypto is often used for online transactions, or it can be kept as a store of value. One of the most popular types is Bitcoin.
However, crypto is becoming increasingly difficult to track, as privacy features can obscure transaction details. As the currency is hard to trace, the government has been advised by Transparency International to prevent money from unknown origins entering the UK’s political system. Government sources have said ministers are concerned the crypto could be exploited by foreign powers or criminals.
Reform was the first political party in Britain to accept crypto (Image: Getty)
The Elections Bill, which will include lowering the legal voting age down to 16, is set to be announced soon. The Bill is also aiming to reduce loopholes in political finance.
However, it may be difficult to introduce as political parties are often given extravagant donations. While crypto is untraceable, and could pose potential threats, critics argue that it’s hard to quantify the monetary value of donations like free concert tickets, artwork and football tickets.
Russia is among the countries embracing digital currencies, after being cut off from the global banking system due to the Kremlin’s invasion of Ukraine.