Building Blocks: The 2024 general elections impact on the future of crypto
Every week Blockchain Sensei will be walking you through the basics of blockchain technology. Consider this your crash course in all things web3!
Prime Minister Rishi Sunak has called for a General Election on July 4th, 2024, potentially shifting power from the Conservatives to Labour. This change could significantly impact the UK’s cryptocurrency industry and its ambition to become a global “crypto hub.”
Despite the government’s aspirations, the UK’s crypto progress has been slow, with ambiguous policies and delayed regulatory implementation. As of 2024, 11% of Brits (about 5.6 million adults) have invested in cryptocurrency, a 250% increase since 2018. However, regulatory uncertainties have led major crypto businesses like Binance and Bybit to limit or cease UK operations. The Financial Conduct Authority’s (FCA) rules have created uncertainty, forcing even established crypto infrastructure providers like Phantom to temporarily halt services for UK customers. However, some companies, such as Backpack, have navigated these challenges to maintain their UK presence.
While the Labour Party has expressed interest in making the UK a “tokenised hub,” their specific crypto policies remain unclear. Some party members have shown skepticism towards cryptocurrencies, potentially leading to stricter regulations. A Labour government could bring mixed reactions from the crypto market. Increased scrutiny might deter institutional investors and entrepreneurs, potentially distancing the UK from becoming a crypto-friendly nation. However, clear regulations could provide long-term stability and protect the market from risks associated with poor governance and scandals.
Initiatives like Coinbase’s Stand With Crypto UK are rallying web3 builders and crypto advocates to champion emerging use cases and support innovative businesses. Some policymakers, including MPs Lisa Cameron and Alun Cairns, see crypto as crucial for a ‘Digital Britain’ and have called for public engagement in policy-making. Another event, scheduled for the day after the election, is the Solana Hacker House in London. Representing a critical opportunity for the UK’s crypto community to showcase innovation, they’ll also discuss the evolving regulatory landscape with policymakers.
For City professionals, this election and its aftermath present both opportunities and challenges in the crypto space. The outcome could either bolster the UK’s position as a leading crypto hub or push it behind in the global race for crypto innovation. As the financial landscape continuously changes, staying informed about these developments will be crucial for anyone looking to navigate the intersection of politics, finance, and technology.